Single tax account

 Published: 23.10.2020. 15.42


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SINGLE TAX ACCOUNT

To ensure that all declarations are submitted prior to tax payment due dates, new deadlines have been set for the submission of several declarations – electricity tax, lottery and gambling tax and employer reports.

To provide an opportunity to pay all taxes via a single bank payment order, as of 1 January 2021, deadlines for regular tax payments will be set for the 23rd  day of the respective month.

The cash amount deposited in the single account will be distributed to cover the taxpayer’s liabilities by tax type using the FIFO principle.

Simultaneously with the single account, the accrual principle will be introduced for accounting of SRS administered state revenue, making tax bookkeeping equal for both the State and taxpayers.

  • WHAT TAXES ARE PAYABLE TO THE SINGLE TAX ACCOUNT?
    • Taxes and duties payable to the single tax account are stipulated by the Law on Taxes and Duties, Section 231 Paragraph five:

      “The taxpayer shall pay to the single tax account the following taxes, duties, other payments specified by the State and related payments (late payment charges and penalties) administered by the State Revenue Service:

      1) personal income tax:

      2) corporate income tax;

      3) value added tax;

      4) excise duty;

      5) natural resources tax;

      6) lottery and gambling tax;

      7) mandatory state social insurance contributions;

      8) electricity tax;

      9) micro-enterprise tax;

      10) subsidised electricity tax;

      11) state duty for business risk;

      12) state duty for the rights to use the numbering (ENUM);

      13) licence fees;

      14) payments for the use of state capital;

      15) payments in accordance with claims made by the tax administrations of the Member States of the European Union and other countries for the collection of tax debts;

      16) customs payments stipulated by Customs Law, Section 1 Paragraph four.”

      Customs duties shall be paid on the single account starting from 2023. Until that time, the current procedure is retained.

  • TAX DECLARATION AND PAYMENT PROCEDURE AS OF 1 JANUARY 2021
    • Due dates for declarations and payments will change for a number of tax documents, and some individual terms for MSSIC payments announced by the SRS will become invalid.

      For all declarations due by the 20th day of the month, the current deadline will remain unchanged, e.g. declarations on value added tax, corporate income tax, excise duty and natural resources tax. Whereas, to ensure that a tax is declared prior to its payment due date, the following changes will be introduced as of 1 January 2021:

      • employer reports should be submitted by the 17th day of each month;
      • electricity tax declarations should be submitted by the 20th day of each month;
      • reports on the assessed auction and gambling tax should be submitted by the 15th day of each month.

      There will be a single payment deadline for all regular internal taxes administered by the SRS on the 23rd day of each month. By setting a single deadline by which taxes are payable, the amounts of several taxes can be combined into a single payment in order to be credited to the single tax account via one bank transfer.

      The single due date will not pertain to payment deadlines provided in decisions taken as a result of tax control measures. The current procedure will be retained for irregular payments and payments set by other documents (e.g. SRS decisions).


      TAX DECLARATION AND PAYMENT PROCEDURE AS OF 2021

      Amendments of 23 May 2019 to the Energy Law

      Amendments of 16 July 2019 to Cabinet Regulation No. 40 of 15 January 2013 “Regulations on Value Added Tax Declarations

      Amendments of 10 December 2019 to Cabinet Regulation No. 785 of 16 December 2014 “Procedure by which personal income tax, tax-related late payments and penalties are transferred to the budget

      Amendments to Cabinet Regulation No. 67 of 4 February 2020 “Regulations on Lottery and Gambling Tax Reporting Forms and Procedures for Their Completion

      Amendments of 16 June 2020 to Cabinet Regulation No. 827 of 7 September 2010 “Regulations Regarding Registration of Persons Making Mandatory State Social Insurance Contributions and Reports Regarding Mandatory State Social Insurance Contributions and Personal Income Tax”.

  • HOW THE FIFO QUEUE PRINCIPLE OPERATES
    • The FIFO queue operation principle is first in – first out.

      An amount paid to the single tax account will be distributed automatically by tax type according to the principle that the oldest obligation or principal amount of tax is covered first, followed by late payment charges, if any, and finally penalties, if any apply.

      Both regular payments and debts will be covered according to the FIFO principle, thus, the taxpayer cannot have a tax debt and overpayment in another tax at the same time. The SRS draws attention to changes in the procedure for the use of the declared overpayment. As of 2021, debts will only be covered on the date of approval of the declared overpayment by the SRS, not the date of submission of the declaration.

      The detailed procedure for the automatic distribution of the payment is laid down in Cabinet Regulation No. 661 of 30 October 2018 “Procedures for the Payment of Taxes, Fees, Other Payments and Related Payments Set by the State and Their Transfer to the Coverage of Obligations”.
      FIFO QUEUE OPERATION PRINCIPLE

  • HOW TO FIND OUT WHAT TAXES HAVE BEEN PAID
    • To ensure the taxpayer’s awareness of which taxes are covered from the amount remitted to the single tax account, this information will be available in the SRS EDS system.

      The technical solution provides that the taxpayer in EDS and the SRS employee in MAIS will see the same information, thus making mutual communication more convenient.

  • HOW THE ACCRUAL PRINCIPLE OPERATES
    • As of 1 January 2021, the accrual principle will be introduced in the accounting of State revenue administered by the SRS.

      The accrual principle means that accounting transactions and other events are recognised when they occur (not when money is received or paid to the Treasury).

      With the introduction of the accrual principle, the taxpayer will have the opportunity to obtain correct and comprehensible information on the status of tax payments for each specific historical date selected, which will ensure that state budget revenues administered by the SRS are accounted for in accordance with generally accepted accounting principles. This will make the tax payment process transparent, visible and traceable. It will be possible to see both the calculated liabilities and payments made for each tax.

      Amendments of 23 November 2017 to Section 29 Paragraph two of the law “On Budget and Financial Management


IMPORTANT

In order to ensure that innovations are accepted at a national level – the single tax account and the accrual principle – available in the following year, extensive modernisation of information systems has been carried out, resulting in the replacement of existing obsolete technically outdated information systems with a solution that meets current technical requirements. Improvements to systems are introduced gradually and without disrupting the availability of systems as far as possible, still some of the innovations require additional attention from system users. Please note that new XML versions for EDS documents will be installed by the end of 2020. More information can be found in the Electronic Declaration System by choosing the “Descriptions of formats of EDS electronic documents”.