New principles for settlement of income tax for December
Entrepreneurs whose tax year is the same as the calendar year will settle personal income tax or corporate income tax for December 2012 according to the new principles.
In previous years the advance for December was payable in the amount of the advance for November by 20 December of the tax year concerned. So by 20 December the taxpayer had to pay the advance for November in its double amount.
Now entrepreneurs have two options:
- to file a tax return and settle (pay) the tax due by the 20th day of the following tax year; in such case no advance for December is payable;
- to pay the advance for December in the amount equal to a difference between the tax due on income generated since the beginning of the tax year and the sum of paid advances due for the preceding months – if no tax return is filed and no tax is paid by the 20th day of the following year.
Analogous is the settlement for the taxpayers paying advances on a quarterly basis. They also have to either pay the advance or file the annual return and pay the resultant tax by the 20th day of the following year.
Having the right to choose whether to pay the advance for the last month/quarter, the taxpayers should check which option is more favourable to them. If calculation of the advance for December/Q4 shows tax to pay, and calculation for the annual return indicates overpaid tax to return, it will be more favourable to file the tax return by the 20th day of the following year.
The taxpayers who pay advances in simplified form (in the fixed amount over the whole year) may be obligated to pay shortage tax under the annual return. For them it will be more favourable to pay the advance for December by 20 January and settle the annual tax as late as possible.
In 2013 the twentieth day of January falls on Saturday, so the payment date of the advance for December 2012 or the date of settlement of the annual tax for 2012 are moved to 21 January 2013.
The taxpayers whose tax year is not the same as the calendar year will apply the principles described here to income generated since the beginning of the tax year commenced after 31 December 2011.