Monday, May 28, Vilnius – President Dalia Grybauskaitė signed the amendments to the Law on Tax Administration, introducing adequate penalties for individuals who failed to substantiate the sources of their income and for repeated tax violations.
The amendments, initiated by the President, are directed against illicit enrichment and deliberate tax violations, which do enormous damage to the state, deprive people of their trust in justice and deepen social exclusion. Legal regulation measures increase responsibility for fair payment of taxes. Penalties for tax breaches will no longer be symbolic; therefore, it will not be worth avoiding taxes.
Each year, income of unclear origin accounts for almost one third of total personal income established during tax audits. According to the State Tax Inspectorate, the courts impose minimum penalties of 10 percent in most cases. Over the last two years alone, unsubstantiated income amounted to almost 40 million euros.
The amendments initiated by the President stipulate that those individuals who cannot substantiate their income will be charged with a penalty ranging from 50 percent to 100 percent of their calculated personal income tax. Penalties for repeated tax violations will twofold.
Under the current law, fines for any tax violation range from 10 percent to 50 percent of unpaid taxes.
The practice of stricter penalties for tax breaches reflects the policies implemented throughout the member countries of the Organization for Economic Co-operation and Development. In Austria, Denmark and the United Kingdom penalties for tax violations can build up to as much as 200 percent of unpaid taxes.
The amendments to the Law on Tax Administration will come into force on 1 January 2019.
Last updated 2018.05.30 10:36Back