The VAT arrears  'amnesty' announced in the Budget speech yesterday can rise to up to 80% of the penalties normally charged on late payment, a legal notice shows.

Finance Minister Tonio Fenech announced yesterday that  those having arrears of VAT will benefit from reduced penalties if they declare their arrears by mid-January.

The legal notice says that the Commissioner of VAT may remit, once only, the interest and/or administrative penalty charged to people in arrears.

No one, however, may claim any refund of any penalties already paid.  

CONDITIONS

The 'amnesty' will apply to outstanding balances which were due by October 15.

Eligible persons are to submit all pending VAT returns by 15 January 2012. Such persons will also be required to withdraw any pending appeal before the Appeals Board, the Administrative Law Tribunal or the Court of Appeal by not later than the 15 January 2012.

Where a person pays the resultant balance of tax, interest and penalties by not later than the 15 March 2012, the interest and penalties shall be remitted by 80%.

Where a person pays the resultant balance of tax, interest and penalties by not later than the 15 May 2012, the interest and penalties  shall be remitted by 70% provided that a down payment of 30% of the resultant balance of tax, interest and penalties is made by not later than the 15 March 2012 and the rest is paid in equal instalments for each remaining month;

Where a person pays the resultant balance of tax, interest and penalties by not later than the 15 August 2012, the interest and penalties shall be remitted by 60% provided that a down payment of 30% of the resultant balance of tax, interest and penalties is made by not later than the 15 March 2012 and the rest is paid in equal instalments for each remaining month.

Where a person pays the resultant balance of tax, interest and penalties by not later than the 15 February 2013, the interest and penalties  shall be remitted by 50% provided that a down payment of 30% of the resultant balance of tax, interest and penalties is made by not later than the 15 March 2012 and the rest is paid in equal instalments for each remaining month.
 
Where a person was due to submit a declaration, the administrative penalty shall be reduced to €10 in respect of each default, provided that all missing declarations and the payment of the said administrative penalty are submitted by not later than the 15 January 2012.

The Commissioner of VAT may withdraw any remittance of interest and/or administrative penalties if the person fails to honour in time at least any two instalments; If the Commissioner considers that such remittance could lead to
unjustified gain contrary to or in excess of the purposes of the Acts or if the person wishing to benefit from the arrangement has been convicted of any offence under  the Value Added Tax Act 1998.

See regulations in full by clicking pdf below.