Are there set dates for payment of tax, provisionally or in arrears, and what happens with amounts of tax in dispute with the regulatory authority?
Tax (3rd edition)
Generally, taxpayers do not need to pay the disputed amounts in advance of litigation in cases before the cantonal and federal courts, except for the Swiss Federal Supreme Court.
In the case of a calendar year taxpayer, corporate tax returns are due by April 15 of the following year or with an extension, by October 15. Payment of tax shown on the return is due with the payment. In addition, taxpayers are required to make quarterly estimated tax payments of their amounts due throughout the year.
If the taxpayer overpays their taxes for a year, the taxpayer may file for a refund with the IRS. Both underpayments and overpayments of tax bear interest at statutory rates. Taxpayers facing a potential tax deficiency may make a deposit of tax to prevent the accrual of interest pending resolution of the dispute.
Individuals who have a balance owing for a taxation year must pay on their taxes in full or before April 30 of the following year in order to avoid incurring interest charges. Self-employed individuals are usually required to make pre-determined instalment payments each quarter, by the 15th of each of March, June, September and December (or, if the due date falls on a weekend or public holiday, the next business day), and any remaining balance must be paid by April 30 of the following year. Corporations are usually required to pay their taxes in quarterly or monthly instalments, and any balance owing after payment of the instalments must be paid within two or three months after the end of the fiscal year.
When a taxpayer disputes an assessment of tax, either by filing an objection or by initiating an appeal in the Tax Court of Canada, the CRA is usually barred from collecting the tax until the matter is resolved. However, where an objection is filed by a “large corporation,” as defined by the Income Tax Act, 50% of the amount in dispute is collectible while the dispute remains unresolved. (A corporation is classified as a “large corporation” for the year if, at the end of the year, the total taxable capital employed in Canada by it and its related corporations exceeds $10 million.)
Collection also is not suspended where the dispute pertains to the federal goods and services tax, as well as taxes that the CRA alleges should have been withheld at source from employees or non-residents. In addition, collection may proceed in certain rare cases where the CRA is able to establish that its ability to collect the disputed tax - if the assessment were upheld - would be jeopardized by the delay.
Prepayments of income tax are due by the middle of each annual quarter. Prepayments of VAT are due by the 15th of the second month following the prepayment-period, which can be either the annual quarter or the calendar month (the latter for annual turnovers exceeding € 100.000). As regards annual tax returns, see above point 2.
Assessment decrees can be appealed against, in which case the tax still remains due and enforceable. A suspension of enforcement is usually granted upon request in case that the appeal has a chance of success and the taxpayer does not jeopardize the enforcement of taxes. However, suspension of enforcement gives rise to a monthly interest charge (of 2% above the base rate, currently 1.38%) of the suspended tax payment which will only be due if the taxpayer finally has to pay the disputed tax amount.
Corporate income tax is paid through 4 instalments during the said financial year (15 March, 15 June, 15 September, 15 December Y) and the balance is due on 15 May of the next financial year (for company whose financial year ended 31st December of a given year). Personal income tax is currently paid through quarterly instalments and balance during the year after the one upon which the tax is due. A major reform had been voted in order to withhold the personal income tax on a monthly basis ('le prélèvement à la source') and should apply as from 2019.
VAT is repaid to the Treasury between the 15 and 20 of the month following the one upon which the tax is due.
The contribution on added value ('CVAE') is paid by two instalments of 50% assessed from the added value of the last return in June and in September. The balance (if any) is paid in May of the following year. The contribution on enterprise real estate ('CFE') is paid in June and in September
Further to a tax reassessment, and once the taxpayer receives a 'Avis de mise en recouvrement' (tax collection notice), the latter must pay the whole amount of reassessed tax including penalties (5% or 10%) and interest for late payment (at a rate of 0.4% per month or 4.8% per year).
If the taxpayer decides to challenge the tax collection notice, via a tax claim and then to go to court, payment of the reassessed tax may be deferred until the end of the first level of the court proceedings provided that the taxpayer secures the payment and provides the FTA with financial guarantees.
If the court rules in favour of the taxpayer, the FTA will repay the amount paid initially by the taxpayer, increased by late interest, or will have to refund the cost of the guarantees the taxpayer put in place if he asked for a deferral of payment.
If the court rules in favour of the FTA, the payment of the reassessed tax including penalties and interest for late payment (same rate of 4.80% per year cut in half as from 2018) becomes final and the taxpayer must proceed to payment if he asked for a deferral.
The tax year in Cyprus for individuals and companies is the calendar year.
Both individuals and companies must submit a provisional estimate of profits and tax payable for the year by 31 July of the tax year, together with a remittance of half the estimated tax payable. The estimates may be revised at any time before 31 December of the tax year, and the balance of the estimated tax payable must be paid by then. A penalty may be imposed in the event of an excessive difference between the first and the final estimate.
Individuals who are exempt from the requirement to provide audited financial statements are required to submit their final tax return for the year, with a remittance for any tax payable, by 30 September following the end of the tax year. Tax returns must be submitted electronically via the official TAXISNET system.
Employers must submit their return of payments to employees and tax deducted for each tax year no later than 31 July of the following year.
Companies and individuals who are obliged to provide audited financial statements are required to pay the balance of tax due by 1 August following the end of the tax year. The final tax return must be submitted before 31 March of the following year (15 months after the end of the year in question).
As already mentioned above, Brazilian tax system provides for federal, state and municipal taxes, thus, being very complex since more than 90 (ninety) taxes are foreseen in our tax legislation with different payment dates and regulations.
Please find below a chapter with information regarding the payment date related to the main federal taxes and social contributions:
until the 20th of each month
INSS – payroll tax
until the 20th of each month
IPI – Federal Tax on Industrialized Products
until the 25th of each month
Cofins – Contribution for the Financing of Social Security levied on the turnover
until the 25th of each month
PIS – Program of Social Integration levied on the turnover of company
until the 25th of each month
CSLL – social contribution on profits
up to the last working day of each month
IRPJ – corporate income tax
up to the last working day of each month
IRRF – withholding tax
until the 20th of each month
Note: there are exceptions to the dates mentioned above, which ratifies the complexity of the system. For instance, PIS and COFINS related to financial institutions shall be paid up to the 20th of each month, whereas the IPI related to tobacco cigarettes shall be paid up to the 10th of each month.
If the taxpayer fails to timely pay federal, state or municipal taxes, interest and penalties apply. Federal corporate taxes may be paid in arrears and must be updated based on the monthly SELIC. In case of a self-assessment (“denúncia espontânea”), the penalty is limited to 20%, but it may be increased to 75% in case tax authorities issue a tax assessment notice. Such penalty is reduced by 50% (i.e. a 37.5% penalty) in case the assessment is settled within 30 days.
Taxes in Brazil are usually paid on a provisionally basis.
With respect to municipal taxes, the IPTU tax, which is levied on the owners of real estate property located within the urban area of the municipality and which tax base is the fair market value of the property, calculated by adding the value of the land and the value of improvements or buildings, shall be paid annually, in a single payment or divided in up to 10 (ten) installments, in case of the municipality of Sao Paulo. The same applies to the IPVA state tax, which is charged over the property of any automobile vehicles. IPVA can usually be paid in a single payment (usually with a discount) or divided in up to three monthly installments.
With respect to tax disputes, taxpayers are not required to pay the disputed tax when discussing within the administrative sphere. At this stage, no bond has to be posted.
Pursuant to article 151, III of the Brazilian Tax Code, the tax is suspended in case of an appeal presented within the administrative sphere.
If, on the other hand, taxpayer decides to contest a tax in a judicial lawsuit, it is likely that the court will require a guarantee, which may be provided as a cash deposit, property, bank letter of guarantee or performance bond. Again, pursuant to article 151, II the tax may be suspended.
If the taxpayer seeks a writ of mandamus or files an ordinary action to challenge a certain tax obligation, it can request the judge to grant an injunctive relief or early relief to suspend the tax obligation and stay the payment of tax until the end of the litigation.
There are set dates for the prepayment of income and corporate taxes on 10 March, 10 June, 10 September and 10 December each year, whereas trade tax prepayments are set on 15 February, 15 May, 15 August and 15 November. Wage tax has to be paid by way of withholding on a monthly, quarterly or yearly basis depending on the amount of wage tax due.
Tax assessed but appealed against is regularly still due and enforceable. In order for the tax not to be payable, the taxpayer has to apply for a suspension of enforcement by the competent tax authority or the Fiscal Court. A suspension of enforcement has to be granted if the legality of the underlying tax assessment raises serious doubts. However, payment suspension of enforcement gives rise to a monthly interest charge of 0.5% of the suspended tax payment which will only be due if the taxpayer finally has to pay the disputed tax amount.
Individuals who have an income tax filing obligation must pay preliminary tax for a calendar year by 31 October of that year. To avoid possible interest charges the payment must be 90% of the current year liability or 100% of the prior year liability. Any balancing tax payment in respect of a calendar year must be paid by 31 October of the following calendar year.
Companies pay corporation tax in three installments: (i) on the 21st day of the sixth month of the current financial year a payment equal to 45% of the current year tax liability (or 50% of the preceding year tax liability); (ii) on the 21st day of the eleventh month of the current financial year a payment to bring the total payments for the year to 90% of the current year tax liability; (iii) on the 21st day of the ninth month following the relevant financial year (along with the corporation tax filing) a balancing payment of the remaining 10% of the relevant financial year liability.
VAT and payroll withholding tax payments are made either bimonthly or monthly in arrears along with the relevant filing.
In order to lodge an appeal the taxpayer must pay the tax that the taxpayer believes is due. There is no requirement to pay the disputed amount. However if there is an additional tax liability following the determination of an appeal the additional amount becomes due and payable from the original due date of the disputed amount.
Taxpayers are generally required to make monthly advance payments of corporate taxes (typically calculated as a percentage of the taxpayer’s turnover) throughout the tax year, on account of the annual tax liability, and to pay any balance shown on the tax return when submitted.
If a taxpayer appeals an assessment to the District Court and pending its ruling, tax amounts under dispute (including interest and indexing payments thereon) are suspended.
Payment of VAT is made on a periodic basis with submission of a periodic VAT return (filed on a monthly basis if a certain turnover threshold is exceeded, and if not, bi-monthly). Similar treatment with respect to payment of disputed VAT amounts applies.
Taxes payable under an assessment for a year of assessment are due and payable on the due date whether or not that person appeals against the assessment.
Taxpayers are required to make payment of taxes for the amount raised by the IRB within 30 days from service of the assessment in question. Failure to make payment of taxes on time would result in imposition of additional penalties.
In exceptional cases, however, a taxpayer may apply for judicial review, where the High Court may grant a stay order against the payment of the disputed taxes.
By general rule, taxes for which there is no specific date established for payment remittance to tax authorities must be paid within 5 days following the date in which the tax was triggered. However, taxes that are levied through a withholding mechanism must be duly remitted to tax authorities in the 17th day of the following month in which the tax was triggered, at the latest.
For income tax purposes, corporations must pay the corresponding taxes in March of the following tax year to that in which the taxes were triggered. However, provisional payments (not definitive) and tax returns must be filed by taxpayers on a monthly basis (the 17th day of the following month).
For VAT and excise tax purposes, taxes must be paid on a monthly basis by filing a tax return in the 17th day of the following month in which the tax was triggered at the latest.
Disputed tax amounts do not have to be effectively paid if the taxpayer controverts the corresponding assessment before the tax authorities.
However, if/when the assessment is disputed before the Mexican Tax Tribunals, taxpayers will have to secure payment of the assessment through a guarantee, until the controversy or litigation is definitively resolved (some exceptions apply); otherwise, tax authorities could coercively collect any owed taxes.
Companies must pay advanced tax by 15 February and 15 April in the year following the income tax year. If there are any differences between the taxes levied during the year and the final assessment, the residual amount is due three weeks after the tax assessment has been announced.
Disputed tax amounts must as a general rule be paid within the deadlines even though the tax payer has appealed the case. If the taxpayer wins after the final administrative appeal decision, or a binding court judgment, he will get the amount back with interest.
Further, in addition to the corporate tax deadlines, there are a number of other deadlines throughout the year relating to VAT, withholding taxes, payroll taxes etc.
There are set dates for the payment of regular taxes. If the payment is done after such days there will be interest and surcharge to cover.
Only the tax debts that are under a payment agreement with the tax authority have set days of payment in order to comply with the articles or clauses of such agreement.
Surcharge of ten (10%) and monthly interest will rise regarding the amount under dispute. Interest will rise until the date the payment is done in case the resolution of the dispute is against the taxpayer.
The dates for payment of taxes are the dates prescribed for the filing of tax returns. This is the “pay as you file system” followed in the Philippines. The dates for filing of returns depend on the type of taxpayer and the nature of tax to be paid. Generally, individuals are required to file their income tax returns on or before the fifteenth day of April each year covering the income for the preceding taxable year while corporations are required to file on or before the fifteenth day of April or on or before the fifteenth day of the fourth month following the close of its fiscal year, as the case may be. In case of a dispute with the tax authority, a taxpayer can avail of the administrative remedy of filing a Protest. If the Protest is denied or is not resolved by the Commissioner of Internal Revenue, the taxpayer can avail of judicial remedy by filing a Petition before the Court of Tax Appeals and the Supreme Court. There is no requirement to pay a disputed tax assessment. In fact, even if the tax dispute reaches the Court,its collection, in most cases, is suspended upon the posting of a bond. However, the amount of unpaid tax as finally determined by the Court is subject to interest and penalties computed from the date when the tax was due.
Within a tax year and apart from withholding taxes which can apply on income paid to both individual and corporate taxpayers, the latter (and individuals with business and professional income, although under different rules) may also be subject to payments on account of the final tax due, to be made into three instalments (July, September and 15th of December of the relevant tax year), corresponding to 95% (if the turnover of the previous year was higher than € 500,000) or 80% (if the turnover of the previous year was equal or less than € 500,000) of the tax assessed in the previous year net of not refunded withholding taxes.
Corporate taxpayers may also be subject to special payments on account (in one installment – March – or in two installments – March and October), as well as to additional payments on account (under a surcharge tax) which is due by entities subject to the regime of both payments on account and special payments on account that have reported, in the previous tax year, a taxable profit exceeding € 1,500,000. Final corporate tax is due with the filing of the tax return until the end of May of the following year.
Personal income tax (PIT) is due after the filing of the tax return and until the 31st of August or the 31st of December of the following year, depending when the tax assessment is issued.
For VAT purposes, the deadline for submission of the periodic returns (monthly or quarterly) also applies to the payment of tax.
Whenever there is a tax dispute, the taxpayer may pay the tax and ask for a refund with indemnity interest should he/she win. If the tax under dispute is not paid, a tax enforcement proceeding is initiated and it can be suspended as long as the taxpayer presents a guarantee. Should the taxpayer win, he may claim an indemnity for the costs incurred with the guarantee.
Income taxes are usually to be paid in three moments of the year: a first advance payment by the end of the sixth month of the relevant tax year; a second advance payment by the end of the eleventh month of the relevant tax year and the balance payment by the end of the sixth month following the end of the relevant tax year. The advance payments are computed on the basis of the tax payments of previous years. Such deadlines may be postponed. It is possible to pay the relevant amounts of taxes in instalments (in such a case, interest is due).
In the case of assessment notices issued by the tax authorities, additional taxes as well as penalties and interest are usually to be paid within 60 days from receipt of the notice. In the case the assessment notice is appealed, the taxpayer is required to make provisional partial payment of the tax in dispute. In certain instances, e.g., transfer pricing adjustments for which the taxpayer wishes to require a MAP, the taxpayer can claim the suspension of collection.
Self-assessed taxes are paid within certain times specified in the legislation of each tax type. Payment deadlines for major tax types are as follows:
- Corporate tax → by end of April
- Advance corporate tax → by 17th of May, August, November and February
- Income tax withholding → by 26th of the following month
- VAT → by 26th of each month
- Stamp tax → by 26rd of the following month
- Banking and insurance tax → by 15th of following month (same with the declaration date)
Taxes assessed by the tax authority are paid within a month. However, filing a lawsuit against the assessment automatically ceases the collection of taxes. If the tax court does not cancel the assessment, taxes become collectible, yet higher court may grant a stay of execution decision upon the request of the taxpayer which will cease the collection of taxes again until the final judgment.
Yes. For example, for corporate taxpayers, corporation tax and consumption tax are due by the date of filing tax returns, i.e., two or three months after the close of the relevant fiscal year. In addition, corporate taxpayers make certain interim tax payments during the relevant fiscal year of corporation tax and consumption tax, which effectively are prepayments of the final tax that will be due by the tax returns for that fiscal year. In addition, withholding tax (which is imposed on certain prescribed types of payments such as remunerations of directors and employees, interest, dividends, etc.) is generally due to be paid by the 10th day of the month immediately following the month in which the subject payment was made.
Even if the taxpayer disputes a tax assessment, in prevailing practice, the taxpayer once pays the assessed tax in advance of the resolution of the dispute. This is because the taxpayer’s objection does not have an effect of suspending the enforceability of the assessment and accrual of delinquency tax; so taxpayers have to pay in advance in order to avoid attachments and other collection enforcement actions and paying delinquency tax. Technically there is a provision to postpone tax liabilities upon a petition to the tax authority, however, in practice, it is very rare that such postponement is granted. The exception to this rule is a transfer pricing assessment; that is, if a transfer pricing assessment is issued and if the taxpayer files an application for a mutual agreement procedure to resolve double taxation, the payment of the assessed tax will be suspended, upon an application by the taxpayer, until the resolution of the case through the mutual agreement proceeding, subject to provision of security to the government.
At the start of the fiscal year corporate taxpayers receive in principle a preliminary corporate income tax (CIT) assessment from the Dutch tax authorities (DTA). The amount of this assessment is calculated based on data provided in previous years.
The amount of tax that needs to be paid based on the preliminary assessments can be paid in monthly instalments. The payment of the amount of tax that is in dispute with the DTA, can be postponed until a final judgement is issued.
Tax interest will be charged over the period starting six months after the end of the financial year through six weeks after the date of the CIT assessment. The tax interest becomes due on the total outstanding amount of CIT that is due on the basis of the preliminary and the final CIT assessments for that year. The DTA will in general refund tax interest over the amount of a CIT receivable in case a CIT assessment is not issued within eight weeks after filing a request for a CIT assessment or within thirteen weeks after a CIT return has been filed.
The rate of the tax interest on CIT assessments is equal to the legal interest on commercial transactions, with a minimum of 8%. Interest paid is deductible and interest received is taxable for CIT purposes.
The dates for payment depend on the taxes involved and on the tax deed incorporating them (e.g. tax decision issued by the tax authorities as a result of a tax audit or tax return filed by the taxpayer). In case of tax decisions issued as a result of a tax audit performed by NAFA, the additional taxes imposed under the decision must be paid either until the 5th, or the 25th of the following month after the tax decision is communicated to the taxpayer, depending on the exact date of such communication. In case of disputes regarding the amounts imposed by NAFA, the taxes imposed under tax deeds are still owed, unless their enforcement is suspended as per the law.
However, under the current legislation, challenging the tax assessment does not imply also the suspension of its effects. Hence, in order to avoid immediate tax payment, the taxpayer could either obtain a court decision with that effect or provide the authorities with a payment guarantee (i.e. a bank letter of guarantee or an insurance policy).
By Government Ordinance no. 30/2017 an important amendment was brought in what regards the submission of the bank letter of guarantee. Specifically, the legal provisions now stipulate that the enforcement is suspended/does not start if the taxpayer notifies the tax authority, after receiving the tax assessment decision, that it will submit a bank letter of guarantee. In this regard, the enforcement will continue/will start in case the taxpayer does not submit the bank letter of guarantee within 45 days as of receiving the tax assessment decision.
Taxes from income from employment is deducted from wages and salaries under the Pay As Your Earn (“PAYE”)_system. Every employer paying emoluments to an employee is required to deduct from the amount of emoluments a specified amount of tax and social contributions. Payment is due by the 15th day the following month.
Self-employed individuals must make two payments on account, by 31 January and 30 June, in each year and each payment on account should be 50% of the tax paid in the previous year’s assessment. Final payment of any outstanding tax for that year should be submitted with the individual’s tax return (30 November following the end of the tax year) and should be the tax liability for that year less the two payments on account made.
Companies are required to make two payments on account, by 28 February and 30 September, in each year and each payment should be 50% of the tax paid for a relevant accounting period as defined within the Income Tax Act 2010 (“Tax Act”). Final payment of any outstanding tax for that year should be submitted with the company’s tax return and should be the tax liability for that year less the two tax payments on account made.
Trustees of a trust with income assessable to taxation in Gibraltar must make two payments on account, by 31 January and 30 June, in each year and each payment on account should be 50% of the tax paid in the previous year’s assessment. Final payment of any outstanding tax for that year should be submitted with the trust’s tax return (30 November following the end of the tax year) and should be the tax liability for that year less the two payments on account made.
If a tax payer disputes an assessment, he may appeal against that assessment by notice in writing addressed to the Commissioner within 28 days of the date of service of the notice of the assessment. Any appeal shall be to the Tribunal and the notice of appeal against any assessment shall state the grounds of the appeal, in such reasonable detail as to enable all parties to the appeal to be aware of the issues to be contested.
For corporates with taxable profits of up to £1.5m, tax must be paid nine months and one day after the end of the accounting period. Where taxable profits exceed £1.5m, businesses must pay their tax in four equal instalments. If a company has a 12 month accounting period, instalments are due:
- 6 months and 13 days after the first day of the accounting period
- 3 months after the first instalment
- 3 months after the second instalment (14 days after the last day of the accounting period)
- 3 months and 14 days after the last day of the accounting period
The ultimate date for payment of self-assessed income tax is 31 January following the tax year ending in the previous April. There is also a system of advance payments, known as payments on account, which operates in some cases. However a year’s income tax liability must be settled by 31 January.
It is possible on application to defer paying tax where the amount is in dispute.
However, since 2014, in the case of tax avoidance schemes which are or should have been registered under the Disclosure of Tax Avoidance Schemes (DOTAS) rules HMRC has the power in certain circumstances to require payment of disputed tax in advance of ultimate resolution of the dispute. HMRC exercises the power to require prior payment by issuing an “Accelerated Payment Notice” or “Partner Payment Notice” (APN or PPN) depending on whether the scheme in question involved a partnership (sections 199-233 and Schedule 30-33 Finance Act 2014). The taxpayer has 90 days to object in writing, following which HMRC will confirm, withdraw or amend the notice. There is no right of appeal against the confirmation of an APN or PPN.
Similarly the Diverted Profits Tax incorporates an advance payment procedure, against which there are only very limited appeal rights.