Undercover agents will be responsible for company tax arrears

Changes are planned for the Taxation Act and in the opinion of the Chamber, many of them are positive, e.g. amendments related to tax interests and making undercover agents responsible.

In February, the Ministry of Finance sent amendments of the Taxation Act to the approval round. With these amendments, for example, the liability of undercover agents for the intentionally caused tax arrears will be added to the law. In the Chamber’s opinion, the amendment is positive, because it allows holding liable the undercover agents who have factual control over the activities of a company and have intentionally caused tax arrears for the company. The amendment will help making the tax environment as well as business environment at large more honest, and will make the use of undercover agents less attractive.

In the letter that we sent to the Ministry of Finance, we also expressed support to the amendments that help to simplify the rules related to tax interests. This will decrease the administrative burden on companies and increase flexibility in relation to calculation and payment of tax interests. For example, the interests paid within the framework of payment in instalments, are from now on considered as business expenses.

The Chamber also supported the amendment according to which, the website of the Tax and Customs Board will disclose, in addition to the data on tax arrears, the information on other obligations imposed by the tax administrator, which have not been paid in due time (e.g. penalty not paid, fines). Based on that, the draft will increase the limit of disclosing the tax arrears. While today, the tax administrator is required to issue the certificate on the absence of tax arrears if the tax arrears are  smaller than 10 euros, the new limit is 100 euros.

With the draft there is the plan to give private legal entities who develop the information systems access to information containing tax secrets to maintain and develop information systems. In the Chamber’s opinion, the circle of persons who have access to tax secrets should be narrower, not broader. The broader the circle, the higher the risk that the tax secret is leaked. Therefore we consider it very important that access to the tax secrets is granted only in very exceptional cases.

At the moment it is unclear for us, what is the exceptional circumstance that justifies giving access to tax secrets to the employees of private legal entity. The information systems of the Tax and Customs Board are working well today and have received positive feedback nationally and internationally. Therefore the information systems could be developed without additional changes. If testing with real data is unavoidable, a solution could be considered where the employees of private legal entities are allowed access to real data but based on that data the taxpayer cannot be identified.

The amendments are planned to enter into force on 1 January 2019.