A “sprint” to “settle” thousands of tax cases that will become time-barred at the end of 2026 is being carried out by the Independent Public Revenue Authority.
The Authority’s goal is to ensure that no tax revenue is lost due to the expiration of the relevant deadlines. Audit mechanisms have already received instructions to intensify audits, with an emphasis on cases of heightened fiscal interest and indications of tax violations.
Cases in the Spotlight
More specifically, audit activities are primarily focused on income tax, VAT, and real estate, while particular emphasis is placed on cases where there is evidence of undeclared income or unexplained increases in assets. A key tool for cross-checking is the Bank Account and Payment Registry System, through which tax authorities can compare taxpayers’ banking transactions with the income they have reported to the tax office.
Among the cases that have been prioritized are audits of businesses and self-employed professionals who use electronic invoicing through a service provider. For these specific cases, a three-year statute of limitations applies, which means that tax cases for the year 2022 can be audited until December 31, 2026.
At the same time, income tax and VAT returns for the 2020 tax year are now under scrutiny. For these specific cases, the general five-year statute of limitations applies, which expires at the end of next year. Bank transactions from 2020 also fall into this category and may still be subject to audit, unlike transactions from 2019 and earlier years, which, in most cases, are already considered time-barred.
The 2015 cases
Of particular interest are the 2015 cases for which new or supplementary evidence has subsequently emerged, such as the discovery of the use of forged or fictitious tax documents. In these cases, the ten-year statute of limitations may be triggered, provided that the conditions set forth by law are met and the amounts related to tax evasion exceed the relevant thresholds.
The audit plan also includes VAT cases from 2015 in which businesses and professionals failed to file the required returns. These specific cases are subject to a ten-year statute of limitations, which also expires at the end of 2026, making it imperative to complete the relevant audits within the coming months.
Finally, the tax authorities are also examining even older tax years, such as those from 2010, in cases where an income tax return was never filed or the original return was filed with a significant delay. In such cases, the law allows for the statute of limitations to be extended up to 15 years, enabling the tax authorities to assess taxes and penalties even for very old tax liabilities.
