Overview of filing an income tax return and payment options
Filing an income tax return is a financial obligation for residents. While many hope for a refund, the reality for some is a tax bill to be paid. It is crucial to understand the available options to cover this payment when a balance is due.
On the tax authority’s website, the process for filing the income tax return and all deadlines are clearly explained. When a return shows a balance due, the default guidance often recommends paying in installments. An alternative is to split the total amount into two installments. The main advantage of this approach is that no additional fees are charged. The taxpayer ends up paying the same total either as a single payment or in two parts.
How can installment payments be divided? The plan is straightforward and consists of two parts.
- First payment. This equals 60 percent of the total due, calculated from the declaration. The initial payment is made at the time of filing. It is also necessary to indicate whether you want the second installment, the remaining 40 percent, to be debited directly from a designated account.
- Second payment. If the taxpayer opts for direct debit, the institution coordinating the second installment will debit the specified account and provide proof of payment. Sufficient funds must be available in the account for this automatic debit. If the second installment is not set up for direct debit, it can be paid directly or electronically at any cooperating institution in the country. A model 102 can be downloaded from the tax administration portal or obtained through a relevant delegation or office. In any case, the coordinating body can also be consulted for guidance on the payment process.
Treasury warning: noncompliance could lead to wage garnishment
There is a stern warning: failing to meet the payment obligations may result in collection actions, including garnishment of wages. This underscores the importance of choosing a timely and reliable method to settle the debt.
Postponement of income tax payment
It is possible to request a deferral if funds are not available on the due date. Postponement is available for various tax obligations, including income tax returns, and it can be a practical option when cash flow is tight.
It is important to note that postponement carries additional costs. An annual interest rate, updated in the general state budgets, applies to deferred amounts. For example, the rate should be checked for the current year as it has changed since previous years. It is also important to understand that choosing installment payments is not possible after a postponement has been granted.
The taxpayer must propose deferral terms, specifying the amount to be paid in each installment and the monthly schedule. The tax authority then reviews the request and decides whether to approve it. For debts under a certain threshold, the maximum deferral period may be extended to longer terms, while larger debts may require proof of financial hardship and payment guarantees.
When the debt exceeds the threshold, proving hardship and providing guarantees may be required for approval.
Refusal to postpone payment of tax debt
The tax authority may reject a postponement request. If rejected during the voluntary payment period, the taxpayer must cover the full debt plus late payment interest. Interest accrues from the date the postponement was requested until the day the rejection is communicated.
Notes and citations: The information above reflects typical processes described by the tax authority and is intended for general guidance. For official details, refer to the tax administration’s guidance and applicable regulations in the current year. [Source: Tax Authority guidance and fiscal regulations]