Amendment to the VAT Act – tax security deposit
The amendment aims to make the fight against tax evasion more effective. Upon meeting certain risk criteria, the tax authority will be able to decide on imposing an obligation to provide a tax security deposit.
Amendment to the VAT Act
Tax security deposit
An amendment sets a minimum amount of 5 000 EUR and maximum amount of 500 000 EUR. The company is required to pay the tax security deposit within 20 days from delivery of the decision, either by bank transfer to the financial administration account or by a bank guarantee provided by bank. The security deposit will be used to cover tax arrears that arise after person becomes a taxpayer or a person registered for tax, within 12 months from the date the deposit was paid. If the deposit or part of it is not used, the tax authority will refund it within 20 days after the 12-month period has elapsed since its full payment. The 12-month period does not run during the time when the full amount has not yet been paid.
Amendment to the VAT Act
Who must provide the Tax security deposit?
The obligation to provide a tax security deposit applies to subjects who apply for VAT registration - both in voluntary and mandatory registration cases, for domestic as well as foreign persons. The tax authority may also decide to impose this obligation on already registered persons and taxpayers.
Amendment to the VAT Act
Decision on providing a VAT Security deposit
The tax authority will issue a decision for subjects applying for VAT registration before the registration itself. For subjects who are already taxpayers or VAT registered, the decision will be issued within a maximum of 12 months from the date they became taxpayers.
If the security deposit is not paid or is only partially paid within the specified period, the tax authority may enforce its payment or reject the VAT registration, and any amount already paid will be returned to the applicant.
