The tax year is generally a calendar year, although assessments can be made on the basis of a company's own year-end, provided permission is granted in advance from the Tax Department and the company then adheres consistently to the same date.
All corporate entities must make an annual filing within four months of its year-end or within one month of its audit report, whichever is earlier.
Payment of tax
CIT is payable on a quarterly basis (10 March, 10 June, 10 September, and 10 December) normally commencing the first quarter date after an assessment has been issued.
Late payment penalties
A late payment penalty is assessed on the tax due at the rate of 1% to a maximum of 12%. In addition, the remaining quarterly payments are due immediately for failing to make an instalment on time.
The law also imposes the following penalties:
- A fine of not less than three times the amount of unpaid tax due shall be applied to any person who fails to pay tax by the due date.
- Without prejudice to any harsher penalty, a fine of not less than four times the amount of tax due and unpaid will be applied to any person who, with intent to evade all or part of the tax, commits any of the following acts or abets, agrees, or aids a person who commits such an act:
- The making of false statements in declarations submitted under this law.
- The preparation of false accounts, books and records, reports, or budgets.
- The use of fraudulent means to conceal or attempt to conceal taxable amounts due under this law.
Tax audit process
Tax audits typically occur every three or four years.
Statute of limitations
The statute of limitations for CIT purposes is seven years.
Topics of focus for tax authorities
The tax authorities’ focus during audits continues to be on confirming revenue, ensuring major services providers contracts are tax registered, and seeking additional undeclared salaries and benefits.