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DOI: http://dx.doi.org/10.20534/EJEMS-17-2-61-63
Dr. Mikel Alla, Accounting Studio & Tax Consultancy Lecturer at the University of Elbasan Elbasan, Albania E-mail: [email protected]
Comparative analysis of administrative penalties for taxpayers of Albania and other Balkan countries
Abstract: The key objective of tax administration is that taxpayers helped to fulfillment of tax obligations, but to guarantee such a thing needed tax controls and a better fiscal legislation to penalize taxpayers that commit administrative offenses.
The study aims to analyze administrative penalties for taxpayer offenses in Albania and other Balkan countries.
Regarding administrative penalties, at first glance, Slovenia applies the highest penalties for administrative offenses, which amount up to EUR 125,000. Meanwhile, Croatia and Montenegro apply the highest penalties in the Western Balkans. Bosnia and Herzegovina's fiscal legislation penalizes the same extent as the responsible person that has violated law and business. Referring to the experience of the Balkan countries (Serbia, Bosnia and Herzegovina and Slovenia), Albania may look into the possibility of applying administrative penalties for the responsible person who commits administrative offense to business. It should be provided in legislation, auditor responsibilities and punitive measures for irregular and non-legal certification of financial statements.
Keywords: administrative offense, penalties tax legislation, tax, the Balkans.
1.Introduction tection of Traders and Market, it was ruled unconstitu-
Implementation of tax legislation can not be achieved tional, claiming that the penalty is not in proportion to without the awareness and education of taxpayers for the economic damage.
the voluntary fulfillment of tax obligations. The key ob- 2. Purpose, research question and methodology
j ective of the tax administration is to help taxpayers meet of the study
tax obligations, but to ensure this, tax inspections and a The aim of the study: The study aims to analyze ad-
better fiscal legislation are needed to penalize taxpayers ministrative penalties for taxpayer offenses in Albania who commit administrative offenses. and other Balkan countries.
The issue of administrative penalties in Albania has Basic research question: Does the fiscal treatment of
had numerous debates due to the violation of the con- administrative sanctions vary between Albania and other stitutional principle of proportionality by the Albanian Balkan countries?
government. In November 2015, the Albanian govern- Hypothesis: The fiscal treatment of administrative
ment approved a law that penalized with very fierce sanctions is different in Balkan countries, despite the fines for businesses that committed administrative approximation of legislation to that of the EU. misconduct on bills. Referring to this law, the failure Methodology: The paper will be based on a compara-
to issue a tax invoice with VAT from a taxpayer selling tive analysis ofthe fiscal legislation of the Balkan countries. wholesale goods is punishable by a fine equal to 100% 3. Administrative penalties for taxpayers in Alba-
of the undisclosed or unpaid tax liability, with a fine nia and other Balkan countries of 10,000,000 ALL and a revaluation of income for a Albania. Failure to comply with the registration ob-period of six months. For non-issuance of a tax coupon, ligation is punishable for every violation with a fine of a taxpayer is punished by a fine equal to 100% of unde- 10,000 ALL and 15,000 ALL by category of businesses clared or unpaid VAT, with a fine of 500,000 ALL and (small or large business).
a tax revaluation of income for the last 6 months. This Taxpayer, who does not submit tax returns within
legal reference was overturned by the Constitutional the term, is fined 5,000 and 10,000 ALL by category of Court with the request of the Association for the Pro- businesses.
Section 6. Finance, money circulation and credit
A taxpayer who fails to pay the amount of the tax due within the time limit provided in this law or submits an incorrect tax declaration is liable to pay a fine equal to 0.06% of the amount of the unpaid debt on a daily basis, during which payment has not been completed, but not more than 365 days.
Non-issuance ofVAT tax invoice is punishable by a fine equal to 100% of the tax, undeclared or unpaid tax liability.
The concealment or avoidance of VAT payment, by not submitting documents or failing to disclose the information required under the applicable legislation, leading to the incorrect calculation of the amount of tax, constitutes tax evasion and is punishable by a fine equal to 100% of obligation. Business representatives are accused of being prosecuted.
The taxpayer, who fails to keep records and tax documentation required under this law, is liable to pay a fine of 10,000 ALL and 50,000 ALL by category of businesses.
Croatia. Sentences for late registration in the VAT scheme range from approximately EUR 135 to EUR 26,700 for companies and EUR 66 to EUR 5,300 for the person responsible within the company.
A penalty ranges from EUR 130 to EUR 66,000, including late delivery of the VAT form, delayed VAT payments and errors made to calculate VAT. A penalty ranging from EUR 75 to EUR 6,600 is charged to the taxable person's employees who are responsible for the violation committed. Criminal acts classified as tax evasion in the amount of more than EUR 1.330 are punishable by imprisonment of six months to five years. If the offense causes great damage, the term of imprisonment may range from 3 to 10 years.
Kosovo. Taxable persons who make supplies without being registered will be liable for VAT on those supplies plus an administrative fine of 15% or 25% of VAT, depending on whether the taxable supplies were less Or more than EUR 10,000.
Failure to issue a VAT invoice or issuance of an incorrect invoice will be subject to a penalty of 15% of the VAT amount. Delayed submission of tax returns is subject to a penalty of 5% of the tax liability for each month of delay, but not more than 25% of the unpaid tax liability. Wrong VAT declaration or VAT refund claim is subject to a fine of 15% of the undisclosed tax liability or excess VAT refund when the non-declaration or reimbursement required is more than 10% of the VAT declared to be paid or to be claimed. Cases considered as criminal offenses are cases when the taxpayer intentionally avoids the partial or total payment of VAT or improperly acquires tax refunds or VAT credits.
Macedonia. For late registration, the taxpayer is sentenced to EUR 1,200 and the responsible person is sentenced to EUR 500.
For non-performance of the registration action, the penalty is in the amounts of EUR 2,000 - EUR 2,500 for the taxpayer and EUR 500-EUR 1,000 for the legal representative. Business is sentenced to EUR 1,200 for late VAT registration and EUR 1,500 for delayed VAT disclosure. The penalty for non-registration or non-payment of bills is subject to fines ranging from EUR 2,000 to EUR 2,500. The same penalties apply if the business fails to pay VAT to the bank account of the authorities in which the VAT payer is registered or if the taxpayer does not keep accurate accounting.
Serbia. If a taxpayer fails to submit a VAT registration form, a fine of EUR 830 - EUR 16,650 applies from the tax authorities. Also the responsible person in the company will be fined in the amount of EUR 83 - EUR 830. If the legal person submits the late registration form is punishable with a fine of EUR 830. Also the responsible person in the company will be fined EUR83 for the above violation. For the relevant VAT violations, these administrative penalties may apply: fines range from 10% to 100% of unpaid VAT or at least within the range of EUR 2,050 to EUR 4,100 for legal entities and EUR410 to EUR820 for entrepreneurs.
Montenegro. The legal entity will be punished for a offense by a fine of10-100 times of the amount of minimum wage in Montenegro, if:
• fails to issue an invoice for the buyer of the goods or recipient of the services;
• does not submit within the deadline the tax declaration of VAT;
• does not report to the tax authority when it starts or ceases its economic activity and does not report changes in economic activity.
The legal entity shall be punished for for a offense by a fine of 20 to 30 times of the amount of minimum wage in Montenegro, if:
• fails to charge and collect vat when the obligation arises;
• fails to assess the taxable base in accordance with the law;
• fails to issue a invoice and does not keep a copy of the invoice, etc.
Bosnia and Herzegovina. Violations of VAT legislation are subject to administrative penalties expressed in a fixed amount of up to EUR 5,120 and/or a percentage ranging from 50% to 100% of the amount of unpaid VAT. Persons authorized to act on behalf of a legal
person are subject to the same administrative penalties as those imposed on a legal person. For repeated violations and in case the PT hinders the ITA investigations or has committed the offense by fraudulent acts, the punishment will increase by 50%, which means that a 50% penalty will be increased to 75%.
Greece. Greece. Penalties for non-registration are not applied. Administrative penalties for incorrect declaration of VAT and for non-declaration of the VAT form vary between EUR 100 and EUR 500. When VAT is paid after the expiration of two months, one or two years from the payment deadline, the penalty is applied respectively to the extent of10%, 20% and 30% of the tax liability. When the tax assessment ranges from 5% - 20%, 21% - 50% and 51% - 100% of the declared obligation, the additional tax payable is applied at a standard rate of 10%, 20% and 100%.
In the case of non-declaration of the VAT form, will be applied a penalty equal to the amount of payable VAT.
Romania. Penalties range from EUR 250 to EUR 1,100 for late VAT registration. The same penalties apply to late delivery or non-delivery of VAT. The same penalties apply to non-payment and late payment of VAT. In addition to these penalties, daily interest rates of 0.03% and additional penalties of 0.02% per day for non-payment in due time of VAT are applied.
Slovenia. For late payment or for non-payment and late delivery or non-delivery of VAT, entities are penalized with a fine ranging from EUR2,000 to EUR 125,000. In addition, the interest for late payment is applied at a daily rate of 0.0247%. The fines range from 200 EUR to EUR 4,100 for the responsible person of the legal person, who is responsible for non-declaration and non-payment within the VAT deadline, except penalties applicable to
the legal entity. The criminal offense of tax evasion is punishable by up to eight years of imprisonment.
5. Conclusions
Regarding administrative penalties, at first glance, Slovenia applies the highest penalties for administrative violations, which amount up to EUR 125,000. Meanwhile, Croatia and Montenegro apply the highest penalties in the Western Balkans compared with other countries. These penalties amount to EUR 28,800, but depending on the administrative offense, as a result of the liability, the penalty may be much higher in other countries. Bosnia and Herzegovina has a specificity regarding administrative penalties. The country's fiscal legislation penalizes the same extent as the responsible person that has violated law and business.
Referring to the experience of the Balkan countries (Serbia, Bosnia and Herzegovina and Slovenia), Albania may look at the possibility of applying administrative penalties for the responsible person who commits administrative offense to business.
Auditors and audit firms in Albania do not perform a realistic audit of the financial statements, even perform the role of the consultant and the compiler of the financial statements, covering the avoidance ofVAT and other tax liabilities. It should be provided in legislation, auditor responsibilities and punitive measures for irregular and non-legal certification of financial statements. Bosnia and Herzegovina's fiscal legislation penalizes the same extent as the responsible person that has violated law and business. A good recommendation for Albania would be to adopt this legal reference, but administrative penalties should be imposed in accordance with the principle of proportionality.
References:
1. Law - No. 9920, dated 19.5.2008 "On Tax Procedures in the Republic of Albania".
2. Instruction of FM, - No. 24, dated 02.09.2008, "On Tax Procedures in the RA"
3. "Tax Glossary" International Bureau of Fiscal Documentation.
4. Law 92/2014 "On value added tax", as amended.
5. Instruction of FM, - No. 6, dated - 30.01.2015, "On Value Added Tax in the RA".
6. Constitution of the Republic of Albania
7. Tax laws of Balkan countries taken in the analysis
8. Directive of the European Parliament and Council - 2006/112/EC of 28 November - 2006 "On the common system of Value Added Tax", No. CELEX 32006L0112, Official Journal of the European Union, Series L, - No. 347, dated - 11.12.2006, - P. 1-118, as amended.
9. Worldwide VAT, GST and Sales Tax Guide - 2015, EYGM Limited.
