When a tax declaration is delayed, the consequences can be more than just a missed deadline. In the complex world of taxation, deadlines are pivotal. Therefore, every taxpayer, whether an individual, a corporation, or any other entity, must understand the weight of the annual tax declaration deadline.
But life happens, and sometimes, even with the best intentions, we miss the filing deadline. What then? Let’s delve into the implications of a delayed annual tax declaration in Romania.
First, before explaining the consequences, it’s helpful to understand why a tax declaration delayed is more common than anyone might think. In most cases, taxpayers don’t intentionally miss the deadline. It often results from specific, real-life situations.
For instance, individuals who have recently moved to Romania or changed their tax residency status may not yet be fully aware of their annual filing obligations. Others might have multiple income sources – such as rental income, foreign dividends, or freelance earnings – and may assume that only some of these need to be declared. Sometimes, technical issues with the tax registration process or delays in receiving clear guidance from ANAF can also cause unintentional delays.
Another frequent reason is the lack of guidance. ANAF does not currently send out proactive deadline alerts or guidance on how to file an annual tax return. And without a tax advisor monitoring their situation, taxpayers might simply forget about the deadline.
By recognizing the real-life causes that lead to such delays, you can better understand your own situation and avoid repeated errors in the future.
The most immediate consequence for any individual submitting the annual tax declaration with delay is the imposition of a late filing fine.
In the case of individuals, the failure to submit the Romanian annual tax declaration within the legal deadline provided by law constitutes an offense and is punishable with a fine ranging from 50 lei to 500 lei.
These are financial sanctions that, as per the Romanian tax legislation, are designed to encourage timely payment of taxes. They are always calculated as a percentage of the total value of the taxes owed. Therefore, as time progresses without paying the due taxes, the interest and penalty will accumulate, making the eventual tax bill considerably larger than initially expected.
This means that not only are you penalized for being late, but the longer you wait, the more your debt grows as it accumulates interest and penalty. The applicable rates and how they apply are described below, but the message is clear: delay is costly. While it might seem like a minor oversight at first, a tax declaration delayed can lead to a cumulative financial burden that escalates quickly if not promptly addressed.
So, if you delay payment of your taxes after you file your annual tax return, late payment penalties and interest will be applied, as follows:
Late payment interest and penalties are both calculated from the day immediately following the tax payment deadline, until the date of settlement of the total owed amount of taxes, and must be credited to the same budget to which the principal claim belongs.
In addition to the late payment interest and penalties, the tax authorities can also calculate and impose a penalty for tax obligations that are undeclared or incorrectly declared, and established as part of a tax inspection.
The level of the non-declaration penalty is 0.08% of the total taxes due, per each day of delay, starting from the day immediately following the due date until the date of settlement of the owed amount. This penalty is calculated on the main tax obligations that are undeclared or incorrectly declared and established by the tax inspection body through assessment decisions.
In anyways, the non-declaration penalty cannot be greater than the level of the main tax claim to which it applies.
According to the tax law, the tax authorities cannot impose the non-declaration penalty if the amount calculated is less than 50 lei. Another important aspect is that the late payment penalty (described above) does not apply to taxes for which a non-declaration penalty is due.
While life can often be unpredictable, it’s essential to approach tax declarations with as much foresight and punctuality as possible. The consequences of an an annual tax declaration which is delayed can be far-reaching, both financially and emotionally.
However, with proactive measures, understanding of the consequences, and perhaps professional guidance, you can navigate the choppy waters of tax delays with minimal distress.
