Receiving a reminder is never a joy, but a reminder to file the income tax return can give stress. Your oversight? Was it not already filed? Help.
Reminder to file the income tax return
Right now it is March 2023 and you wonder why I start about a reminder to file the income tax return. The invitations have just been send.
It is not the 2022 income tax return reminder I would like to address, but the 2021 income tax return reminder. Some use the services of a tax advisor like us or accounting company and then you are more or less automatically in their delay system. What is a delay system? The professionals have the opportunity to get a longer extension to file, then you would be able to get on your own.
Most tax and accounting firms use that delay system to spread the flow of tax returns over the year.
Is 2021 still not filed?
Is probably your first response. Clearly it was not, as you would not have been reminded. The reason for reminding can be multiple. Whatever was the cause, you have been send a reminder, what does that imply?
The moment you receive a reminder it implies you are not yet too late to file the income tax return, but in the reminder you find a deadline. That deadline you now need to meet. This deadline cannot be delayed.
What is the new deadline, 10 days or a month?
If the deadline is 10 days, this implies you were already reminded with a one month deadline. Now the tax office means business, hence they give you one more time to file. But that has to be done in a 10 day time period.
What happens if you are too late still?
If you are too late to that final 10 day reminder you receive a penalty. The penalty starts at EUR 385 and can go up to EUR 5.514. In our experience the EUR 385 is the most often used penalty. You will not notice much, but the moment you receive an assessment, the EUR 385 is added to the amount to pay.
There have been court cases where a tax payer showed over a period of a couple of years not to be willing to file an income tax return. Then the EUR 5.514 penalty is being used and can be used for any following year. This penalty can be argued in court, but if the court sees the time frame that has passed without any tax return been filed, the penalty will not be adjusted,
Besides the penalty, the tax office will not wait anymore and impose on you an assessment what they think you should pay in tax. You can ask adjustment of that amount, but only based on a tax return. The payment of that ex officio assessment will be enforced and could imply your assets will be sold. The house you own is an asset.
Tax is exciting
We think tax is exciting. We prefer not to use the delay rule for the majority of our clients. Sometimes it is however convenient when not all details for the May 1 deadline can be provided. Then again, delaying the tax return will not only cause interest to be paid but also confusion. The confusion basically starts now, when you are ready to file 2022 and then it turns out 2021 was not filed yet. Have us help you solve that reminder by filing the 2021 income tax return.