The law applies to tax liabilities arising under the Income Tax Law; Special Contribution Law; Immovable Property Law; Capital Gains Tax Law; Inheritance Tax Law; Special Contribution Law; Stamp Duty Law and VAT Law.
The scheme applies in the following cases:
- Taxpayers who have tax liabilities under the above-mentioned laws for the years up to and including 2015 which at the time of application have been assessed by the Tax Department and need to be settled.
- Amounts due as a result of submission of a self-assessment for the years up to and including 2015 where the tax returns have been submitted but no tax payments have been made.
- Tax liabilities assessed by the Commissioner of Taxation after 3 July 2017 and relate to tax years up to and including 2015. In such cases, the application for the scheme must be made within three months from the date which the tax becomes due.
The relief of interest and/or penalties will be applied on the overdue taxes based on the number of instalments arranged (with a maximum amount of 60 instalments permitted under the scheme). Significantly, the law provides for up to a staggering 95% relief from the charges imposed if a lump-sum payment is made for the full settlement of the tax debt.
The law allows a taxpayer who is not satisfied with the Tax Commissioner’s decision to object, providing the reasons for the objection and providing supporting documentation and the Commissioner must respond within 30 days from receiving the objection. Furthermore, where a taxpayer who makes an application for settlement under the new scheme is under criminal prosecution, the Commissioner informs the Attorney General accordingly to consider suspending the prosecution.
An agreed settlement scheme can be terminated in the following instances; where the taxpayer fails to file tax returns and VAT returns during the agreed settlement period; where the taxpayer fails to settle a liability for the period after 15 December 2015; delays in paying any three instalments or one instalment for more than three consecutive months.
If you are interested in benefiting from the new amendments, applications to enter this scheme must be submitted within three months from the date the law comes into force (3 July 2017). Exemptions are made for cases where the tax liability is assessed after 3 July 2017.