HOW DO I AVOID THE PENALTIES AND INTEREST CHARGES?
All taxpayers who have paid their tax debt in full on or before the tax due date will not be liable to any penalty/ interest charges. Therefore it is important that you to comply with the due dates and submit your tax return either physically or electronically.
PENALTIES FOR VALUE ADDED TAX
VALUE ADDED TAX GENERAL PENALTIES
Section 93 of Value Added Tax Act, 2010 states that “A person who commits an offence under this Act in respect of which no penalty is prescribed shall be liable, on summary conviction, to a fine not exceeding ten thousand dollars or to imprisonment for a term not exceeding six months or both.
VALUE ADDED TAX CIVIL PENALTIES
Failure to register or display certificates Section 96; subsection (1) - A person who fails to apply for registration as required by subsections (4),(6), (9), (11), and (13) of section 2 shall be liable to pay a civil penalty equal to double the amount of output tax payable from the time the person is required to apply for registration until the person files an application for registration with the Comptroller. Subsection (2)
A person who fails to display the certificate of registration issued by the Comptroller as required by section 20 shall be liable to pay a civil penalty of $50 per day in respect of each day or portion thereof that the failure continues.
FAILURE TO NOTIFY COMPTROLLER
A person who fails to notify the Comptroller as required by section 22 or 23. (1) and (12) shall be liable to pay a civil penalty not exceeding one thousand dollar.
FALSE TAX INVOICE (SECTION 98)
A person who issues a false invoice or false sales receipt, uses a false taxpayer’s identification number, fails to provide a tax invoice, sales receipt, tax credit note, or tax debit note, or provides one otherwise than as provided for in section 43 or 44,shall be liable to pay a civil penalty not exceeding twenty-five thousand dollars.
LATE FILING PENALTY (SECTION 99)
A person who fails to file a return within the time required under this Act shall be liable to pay a civil penalty of one hundred dollars per month, or part thereof, for the period during which the return remains unfiled.
FAILURE TO COMPLY WITH NOTICE FOR RECOVERY OF TAX (SECTION 100)
A person who fails to comply with a notice issued pursuant to the provisions of section 59 shall be liable to pay a civil penalty not exceeding twenty-five percent of the amount sought to be recovered from the person.
FAILURE TO KEEP RECORDS (SECTION101)
A person who fails to maintain proper records as required by section 79 shall be liable to pay a civil penalty of fifty dollars per day in respect of each day or portion thereof during which the failure continues.
FAILURE TO PROVIDE FACILITIES (SECTION 102)
A person who fails to provide a taxation officer with reasonable facilities and assistance as required by section; 83(3) shall be liable to pay a civil penalty not exceeding one thousand, five hundred dollars.
FAILURE TO COMPLY WITH NOTICE UNDER SECTION 81 (NOTICE TO OBTAIN INFORMATION OR EVIDENCE)
A person who fails, within the specified time, to comply with a notice issued under section 81 shall be liable to pay a civil penalty not exceeding ten thousand dollars.
LATE PAYMENT PENALTY (SECTION 105)
Where a person knowingly or recklessly makes a statement to a taxation officer which is false or misleading in a material particular or omits from a statement made to a taxation officer any matter or thing without which the statement is misleading in a material particular, and the tax properly payable by the person exceeds the tax that would be payable if the person were assessed on the basis that the statement is true. The person shall be liable to pay to the Comptroller a civil penalty equal to the greater of twenty thousand dollars.
WHAT IS THE INTEREST RATE?
Please see the summary schedule below;
| TAXES |
INTEREST RATE PER MONTH |
PENALTY |
| Corporate Income Tax |
1% |
10% of tax due
$100 per month (late filing)
$1000 (exempt companies)
|
| Value Added Tax |
1.25% |
10% of tax due
$100(late filing)
|
| Island Enhancement Fund |
1.25% |
10% of tax due
|
| Property Tax |
1% |
10% of tax due
|
| Unincorporated Business Tax |
1% |
10% of tax due (payments only)
$100 per month (late filing)
|
| Hotel Accommodations & Restaurant Tax |
1.25% |
10% of tax due (payments only)
$100 for late filing
|
| Withholding Tax |
1% |
10% of tax due
|
| Business & Occupation Licence |
1% |
$50 per day
|
Please see the applicable penalties summary schedule below: