The taxable period corresponds to 12 months. The first taxable period can be less than one year but should never exceed it.
CIT returns must be filed within three months following the closing of the fiscal year.
Payment of tax
Payment of tax is made during the fiscal year by way of four instalments of 25% each based on the CIT of the previous year.
In case the CIT of the year exceeds the sum of the four instalments, the company should proceed to tax regularisation along with the submitting of the taxable income return after three months following the closing of the fiscal year (i.e. 31 March for fiscal year corresponding to the calendar year). Otherwise, the exceeding tax amount should be offset against the following instalments without limitations.
Finance Law 2016 provides for the application of the following rates for penalties and late payment interest:
In case of late tax return:
- 5% penalty in case the tax return is submitted within 30 days following the legal deadline, or in case of corrective return.
- 15% penalty in case the tax return is submitted after the above mentioned 30 days.
- 20% penalty in case of automatic taxation due to non-submission of tax return.
In case of late tax payment:
- 5% penalty in case the tax payment is made within 30 days following the legal deadline.
- 10% penalty in case the tax is paid after the above mentioned 30 days.
- 20% penalty in case of non-payment or late payment of VAT and other WHTs.
- 5% interest related to the first month late tax payment and 0.5% interest for the following months.
Statute of limitations
The statute of limitations runs until the end of the following fourth year. This period may be extended in case of deficits or credits.
Topics of focus of tax authorities
The topics of focus of tax authorities depend on each specific situation (sector of activity, company size, etc.). However, it is very common to find the following points:
- Transfer pricing.
- Tax treatment of provisions.
- Taxation of indemnities and benefits granted to employees.