If a taxpayer fails to file a tax return or files the tax return after the statutory due date, late interest is applied at the annual rate of inflation plus a flat penalty equal to 60% (reduced from 100% by Law No. 1448 of 25 July 2022) of the amount outstanding. The penalty does not apply if a taxpayer pays the amount outstanding within 20 days (increased from 10 days by Law No. 1448) from the date of receiving an order of demand from the tax authorities.
The aforementioned interest and penalties may be reduced to 0% if a voluntary and spontaneous payment of the total amount due is made by the taxpayer. Spontaneous means a payment made without any previous action of the tax authorities, i.e., prior to the commencement of an audit. If an action of the tax authorities was notified to the taxpayer, a progressive reduction (from 80% to 20%) of the penalty may be granted depending on the stage of the audit or the legal process.
Delay in payment of tax attracts penal interest at the following rates:
- 4% per annum for the first 4 years of arrears (beginning the day after the payment is due);
- 6% per annum from the 5th year until 7th year; and
- 10% per annum from the 8th year until paid.
For inaccurate and /or incorrect filing, additional formal penalties may apply (USD 60 for each conduct).