The appeal of a tax audit act does not lead to the suspension of its enforcement.
However, the individual/legal entity may avoid enforcement when he/it:
- Pays the due taxes and interests;
- Requests the enforcement suspension and provides security.
We are interested here in the second option: suspension further to a request of the individual or legal entity. The disadvantage is that interests continue to accrue, which leads to a general increase of the debt.
Requirements to the request
- The suspension shall be allowed only against security. There are two options:
- The public enforcement agent has already imposed security – the individual or legal entity provides the respective public enforcement agent’s order;
- The individual or legal entity suggests security – the individual or legal entity provides evidence about the type, ownership, and value of the security.
- The security shall be sufficient in amount
The security is sufficient in the amount if its value covers the due taxes and interests at the moment of the request.
- Compulsory suspension of the enforcement
The enforcement of the tax audit act shall be suspended if the security presented by the individual or legal entity covers the amount /value of the tax liabilities and the interests and is:
- In money;
- An unconditional and irrevocable bank guarantee or
- Government securities.
- Suspension at the discretion of the authority
In cases not mentioned under p. 3 above the authority shall decide at its discretion and may suspend the enforcement.
The security may be:
- A real estate property;
- Objects and receivables;
- Bank accounts;
- Goods in circulation.
The value of the security is estimated in compliance with the balance value of the assets, and when there is no such one, the value is determined as per the documents as enumerated below:
- The tax assessment;
- The insurance value;
- The acquisition value of the real estate property – owned by individuals.
Authority entitled to suspend the enforcement?
- The request shall be addressed to:
- Director of Directory “Appeal and tax-insurance practice” (Director of D “ATIP”); or
- Administrative Court.
The authority which shall review the request is the one competent to review the appeal in substance. The authority depends on the stage of the appeal of the tax audit act.
- The request shall be made only for the appealed part of the tax audit act.
That is made either together with the initial appeal or later with a separate request.
- Evidence related to the request should be attached to the request.
- The ruling of the authority
The Director of D “ATIP” shall decide on the request for suspension of enforcement in a decision within 7 days as from the submission of the request.
The Administrative Court decides in a ruling within 14 days of the submission of the request for suspension.
- The appeal of the refusal
The individual or legal entity may appeal the refusal for suspension before the respective administrative court within 7 days of receipt of the decision or the expiry of the term for the delivery of the decision.
The court’s ruling may be appealed before the Supreme Administrative Court court within 7 days of notification of the ruling.
- Grant of the request
If the authority grants the request it obliges the public enforcement agent to impose security measures on the suggested property within a specified period.