Deferral of tax payment - what is it? Procedure and types of deferrals

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Often, due to certain circumstances, the subject may have difficulty paying taxes. A tax deferral is a way to buy time if necessary due to a difficult life situation that in one way or another affects the ability of an individual to be a decent taxpayer.

Basic concept

A tax deferral is a modified period of time for making a payment, which is available for a period of one month to three years. A prerequisite is the obligation of the taxpayer to pay, in addition to the amount of debt, and timely tax. Payment may be in installments or lump sum. However, tax deferral is a little-known phenomenon that few citizens are familiar with. The provision of such an opportunity is listed in the Tax Code of the Russian Federation, and cases of tax deferral are considered by the relevant types of state authorities. The procedure for considering the provision of such services to a taxpayer is individual, so it is almost impossible to name specific ways to obtain the right to defer payment.

Order of acceptancesolutions

The procedure for making a decision on granting the right to defer payment of taxes is a complex and multicomponent task. It is related to the point on the grounds necessary for obtaining the right to installment plan or tax deferral, which will be discussed in detail below. If we talk about the general situation and procedure, it is important to know that, first, the subject needs to contact the relevant authorized bodies and find out the list of documents and reasons necessary to obtain this type of right. After that, you should collect the necessary documentation, provide evidence of the existence of the reason that caused the subject to be unable to pay the tax. If there is no weighty evidence that is provided by the authorized bodies in accordance with legislative documents, then there is simply no chance of obtaining the right to defer or installment taxes. With the collected package of documents and the application, you must again contact the authorities responsible for making such decisions and submit your request for consideration. After that, the subject's application will be considered in various instances and authorities, which will determine within a month whether they will grant or not grant the right to installment or deferment of tax payment.

Types of tax deferrals

There are two main types of change in the deadline for paying tax. The first type is the payment of taxes in installments, and the second is the deferment. They differ from each other in that:

• installment isphased partial refund of tax debt;
• postponement is the postponement of the moment of payment in its entirety.

Installments and tax deferrals

Deferral and installment payment of taxes are two concepts that should be considered together. They are similar in nature and have some common provisions. Granting a tax deferral requires the presence of grounds of the same nature as those that must be observed if the subject needs an installment plan. It is important to know that deferment and installment plans can be provided both for one tax and for several. In order to qualify for a deferment or installment payment of taxes, you must have good grounds and the ability to prove the need to obtain these rights. Also, in order to use the right, it is necessary to submit an appropriate application for tax deferral to the authorities that are responsible for this.

The request is accepted by the relevant governing bodies in agreement with the extrabudgetary forms of bodies. The application is considered within a month after its receipt from the interested entity.

In some cases, the authorized bodies are not en titled to refuse to provide the opportunity to defer or installment payment of tax. Such cases are in the nature of force majeure, independent of the subject, and may have a different form, for example, a natural disaster or a man-made disaster. After deciding ongranting the right to a deferral or installment plan for the payment of taxes, pen alties will be charged daily. The pen alty will be paid by the taxpayer for the duration of the agreement.

Statement

Application for tax deferral must be submitted in writing. It must be indicated in it:

• total amount of taxes, number of fees;
• punitive (financial) sanctions (fines);
• the amount of interest that the taxpayer undertakes to pay, the amount of interest that he asks to be paid in installments;
• Due dates required for payment.

Separately, you need to indicate the amount of funds to be paid, the amount of debt, the payment period, which has already expired.

The application must be accompanied by:

• analysis of the financial condition of the entity;
• list of testimonies and proofs that make it possible to verify that there is a threat of non-payment of taxes or the possibility of its occurrence;
• drawn up schedule, according to which the debt will be repaid;
• debtor's income projections that can guarantee meeting the debt repayment schedule.

Grounds for granting the right to tax deferrals

As mentioned earlier, a tax deferral is a change in the time interval required to pay taxes due to certain reasons. To obtain such a right, serious, specific and weightygrounds.

Below is a list of the main types of grounds that may be valid in the event of a need to receive an installment plan or tax deferment.

An individual is in a situation that prevents them from making a one-time tax payment.

When paying a lump sum of tax debt, an individual will expect bankruptcy.

Occurrence of circumstances that do not depend on the subject, but are insurmountable and cause significant damage to property (man-made disaster or natural disaster).

Seasonal nature for the sale and/or production of goods used by the taxpayer for profit. The government approves a special list of activities and industries covered by this paragraph.

Other types of grounds that are provided for in the legislation of the Russian Federation in relation to taxes

Features of the provisions of the Tax Code of the Russian Federation

Granting a deferment or installment payment of tax can be carried out due to the above grounds, but it is worth considering the last point in more detail. The list of reasons that can serve as a basis for granting the right to an installment plan or deferral of tax payment, which is in the Tax Code of the Russian Federation, is quite capacious and non-exhaustive. It may have additional clauses in relation to taxpayers. Some of the additions are listed in the Customs Code of the Russian Federation and may apply to perishable goods thatimported into the Russian Federation; goods that are part of the execution of international agreements and many others.

Federal Tax Deferral

Deferral or installment payment of federal taxes has two types of term. The first variant of a term lasting from one to three years is being considered with the participation of the leading tax authorities of the Russian Federation. The second option is a period not exceeding five years.

Deferment under the second option is possible for one or more federal taxes, including pen alties for them and all accrued pen alties. A federal tax deferral may be granted if the amount of the organization's debt at the time of application is more than ten billion rubles. At the same time, the condition must be observed that the timely payment of the tax will create the likelihood of an economic and social threat.

Fee deferment

Payment of fees may also be delayed. Deferral and installment payment of taxes and fees are indicated in the Tax Code of the Russian Federation. If we talk specifically about installment and deferment of fees, then it is important to know that the state fee is also considered a fee. Because of this, the provisions of Chapter 9 of the Tax Code, concerning changes in the timeframes required to reimburse the debt on taxes and fees, also apply to the state duty. Features for the payment of state duty are determined by the chapter of the Tax Code 25.3.

Change in the time required to pay taxes

Changing the tax payment deadline (delay,installment) is an important aspect in the life of a taxpayer. Using this right allows you to find a way out of difficult or even hopeless life situations. The conditions of such peculiar tax benefits, which are subject to the provisions of the Tax Code of the Russian Federation, vary depending on the needs of the entity interested in obtaining the right to change the deadline for making a mandatory payment. After a request for such rights has been submitted, the application has been considered and accepted, if any, a second change in the conditions becomes unlikely, but still possible only due to serious circumstances. In another case, you can wait for the expiration of the agreed period and try to negotiate again. This is possible provided that the taxpayer has paid the previous debt.

Conclusions

Having considered the above aspects, points and characteristics of the special right to grant an installment plan or deferral of tax payment, it is also important to understand that a lot of work must be done to obtain such an opportunity. Be sure to have a reason that meets the requirements of the Tax Code. It is important to prepare a complete list of required documents, you need to be prepared for the fact that they will be specified in the relevant authorities. It is important to follow the instructions of the authorities that will assist you in obtaining the possibility of tax deferral.