When the tax debt expires: As much as 50 percent of the interest is written off

The Tax Administration sends a reminder after the deadline for tax payment has expired, and before taking further enforcement measures, such as account blocking or property enforcement.

When the tax liability is due, there is a certain deadline within which the tax must be paid. This deadline depends on the type of tax but is usually clearly defined in the tax ruling or legal regulations.

The deadline for payment after a reminder can change, but it is five to 15 days from the day of receipt. If the taxpayer does not pay the debt within the stipulated period, it is considered that he has outstanding tax debts.

Just as tax collectors can determine the tax within five years, they have the same deadline for collecting the tax due. If he does not collect the tax within five years of the obligation arising, nor does he send a reminder to the citizen or take any action to collect the tax within that period, the right to collection is lost at the end of the period.

The statutory limitations for the tax debt begin on January 1 of the following year in which the tax liability arose, and the Tax Administration can demand tax collection with the associated interest five years back.

The absolute obsolescence of the tax debt represents a situation when the Tax Administration has no right to demand the collection of due fiscal duties, which in practice, according to the taxman, rarely happens.

If the Tax Administration takes any action, that is, if it sends a reminder for tax debt and the like, then the statute of limitations is interrupted and begins to run again according to the same rules, that is, the statute of limitations of five years is applied again.

Should the Tax Administration issue a tax assessment decision after the statute of limitations has expired, the citizen should file an appeal in which he will request that the decision be void, because it was passed after the statute of limitations expired.

When it comes to natural persons who conduct business, i.e. entrepreneurs, the Law on Obligations applies to them, which interprets the statute of limitations as the termination of the right to demand the fulfillment of an obligation.

The statute of limitations begins when the legally determined time in which the creditor could claim the fulfillment of the obligation has passed, and it runs from the first day following the day when the obligation was supposed to be fulfilled. The limitation period for mutual claims of legal entities is three years, however, since the entrepreneur is a natural person, then the general limitation period of ten years applies, which applies to natural persons.

The Tax Administration may, at the justified request of the taxpayer, postpone the payment of the owed tax in whole or in part, provided that its payment represents an unreasonably large burden for the taxpayer or causes substantial economic damage.

Postponement of the payment of the owed tax is done by signing an agreement between the Tax Administration and the taxpayer, that is, by deciding by the Tax Administration.

For the taxpayer to be able to exercise the right, it is necessary to submit a request to the competent organizational unit of the Tax Administration, with the request also submitting a means of securing the collection, which cannot be less than the amount of the owed tax whose payment delay is requested.

Means can include a mortgage on real estate, a guarantee of another person, the owner of the property, a pledge on the taxpayer's movable property, and an irrevocable bank guarantee.

To a taxpayer who, by the Law on Tax Procedure and Tax Administration, has deferred the payment of owed tax, and who regularly pays installments of due obligations and current obligations, if he pays the owed tax before the deadline, 50 percent of the interest related to the deferred debt is written off.

The write-off (up to 50 percent) of the interest is not exercised for delaying the payment of owed tax if the obligation is already determined.