Taxpayers may make errors or make incomplete declarations on their tax returns for various reasons. This may result in tax disputes and high penalties. Fortunately, the Tax Procedure Law (VUK) offers the institution of repentance and correction, which allows taxpayers to correct their mistakes and avoid penalties.
In this blog post, we will examine the institution of repentance and correction in detail. While discussing the subject, we will touch upon the following topics:
1. What is Repentance and Correction?
Regret and reclamation is an institution that allows taxpayers to avoid tax loss penalties if they automatically report their illegal actions (for example, under-declaration, mis-declaration, inconsistency in records) to the tax office and compensate for the tax loss.
2. What is the Purpose of Repentance and Correction?
The main purpose of repentance and reform is to resolve tax disputes at the administrative level without being brought to court. In this way, taxpayers are encouraged to fulfill their obligations and tax losses are prevented.
3. Who Can Make Repentance and Correction?
In taxes based on declaration (for example, income tax, corporate tax, value added tax), all taxpayers who commit acts that require tax loss penalties can make repentance and correction.
4. How to Make Repentance and Correction?
For remorse and correction, the taxpayer must fill out a regret petition and submit this petition to the tax office within certain periods. In the petition, it must be clearly stated in which tax type, in which period and in what amount the taxpayer caused tax loss. Additionally, the tax loss amount must be paid in cash or in installments.
5. What are the Conditions of Repentance and Correction?
In order for repentance and correction to be accepted, the following conditions must be met:
• Acts requiring tax loss penalty have been committed for the first time
• The taxpayer must submit his/her regret petition and tax loss amount within certain periods.
• Payment of the tax loss amount in cash or in installments
• The matters declared by the taxpayer in the regret petition are correct.
