What are the risks of not filing your annual income tax declaration? A MoneyVox reader wonders about the best solution to reduce the amount of penalties applied by the tax authorities.
Question from Jos, January 16, 2024
For several years I have not paid taxes for not declaring my income. What is the best solution to minimize my penalties and other problems with the tax authorities?
Hello Jos, and thank you for your question. In principle, you must declare your income each year, in the spring, to allow the administration to calculate your tax. If you do not file your declaration, you put yourself in a situation uncomfortable and above all illegal situation. In tax jargon, you are a defaulter.
Usually, the administration reminds defaulters to encourage them to file their declaration. If this reminder has no effect, two cases may arise. If, taking into account the information known to the administration, you are taxablethe administration can tax automatically. This procedure results in heavy penalties (40%). On the other hand, if you are not taxable based on the information available, the administration will not go any further into your file.
The longer you delay, the higher the bill becomes.
In your case José, the first question to ask is: will you be taxable? You can determine it by using the simulators offered on the tax website (one simulator per year).
If the answer is No, you just need to submit your declarations. You risk nothing, financially speaking. You will just obtain your tax documents late, which can penalize you in certain procedures.
If the answer is Yesyour tax is likely to be increased. The increase is 10% in the event of a spontaneous deposit on your part or within 30 days of receipt of a formal notice. Beyond that, it’s 40%. You will also be liable for late payment interest, at the rate of 0.2% per month of delay. The longer you delay, the higher the bill becomes.
The best advice is therefore to file your declarations spontaneously, even late, to minimize potential penalties. It is also the best way to show your good faith.
Outside of this period, online income declaration is not possible. You must complete declarations in paper format and submit them to your public finance center. Deposit can also be done via online messaging, on the tax website, if you have access, by scanning the declarations.
Taxes: what fine from the tax authorities if you validate your late income declaration?
Up to 10 years before the tax prescription
Jos, you do not specify how long it has been since you filed a declaration. Please note that the limitation period also exists in tax matters. Today, only income for the years 2022 and 2021 can be declared. Older years are prescribed. You can no longer file a 2020 (or previous) income declaration and the administration cannot require one either. Your 2020 and older income will therefore never be taxed.
As an exception, if you receive income from a hidden activity, whether legal in the context of undeclared work or illicit (drug trafficking for example), the administration can pay you back over 10 years. The increase can then, under certain conditions, be 80%.