Is there a penalty if a tax return is filed late through no fault of the taxpayer?

Published 27 July 2018. Some rules have changed since; ask us for the current position.

Is there a penalty if a tax return is filed late through no fault of the taxpayer?

According to individual tax ruling No. 3232/6/99-99-12-02-01-15/ІПК issued by the State Fiscal Service (ДФС) on 23 July 2018, if a company has been seized by raiders or forced to suspend operations and therefore cannot file all the required returns with the tax authority on time, the tax authorities take these circumstances into account and do not charge penalties.

The tax authority explained that where an investigation is under way or access to the company's documents and data has been restricted, so that the return cannot be prepared and filed on time, no penalties apply. The company must file its returns later, once the process that prevented it from doing so has ended.

In all other cases of late filing of activity reports or cash flow reports, and of late tax payments, penalties are charged and must be paid within the set deadlines. If a company ignores this warning, does not file its report and does not settle its debts, the consequences can be serious: tax audits will follow, and the tax authority may eventually seize its assets and recover a substantial amount. Only taxpayers who have faced unforeseen circumstances related to such proceedings may postpone filing their return.