According to the State Tax Service, a taxpayer has fulfilled his obligation to pay taxes only at the moment the money has actually been received by the budget. If a taxpayer has timely submitted a payment transfer order to his bank, the money is available on the account but the bank fails to actually transfer the money, the taxpayer would still be liable for paying the tax (but not risk late payment or penalties). Therefore the tax authorities still have the right to withdraw the money from another bank account of the taxpayer. We believe that the legal basis for such opinion is quite narrow and can be challenged in practice.
Letter of the Central Bank, Ministry of Finance and State Tax Service of 4 February 1997 No. 408, 10 and VE-6-05/103
TAX PAYMENT DEFAULTERS
The order of the State Tax Service, Ministry of Finance, Tax Police and Bankruptcy Directorate of 31 May 1996 No. VA-3-10/42, 285, 184, 35 contradicts legislation, has not been properly registered and therefore has no legal force. The order states that in certain cases a deferment of payment of tax arrears could be given only if an insolvency procedure is commenced in court for the taxpayer. In addition, detailed instructions were given for the confiscation of property from tax payment defaulters.
Letter of the State Tax Service of 30 January 1997 No. PV-4-18/1n
In order to verify the payment of pension fund contributions, employers must submit payment transfer orders for pension fund contributions together with salary payment transfer orders. This obligation already existed but in practice has not always been complied with. Banks are not supposed to process salary transfer orders without corresponding transfer orders for pension fund contributions. However, no penalties exist for violating this rule.
Letter of the State Pension Fund, Ministry of Finance, State Tax Service, Central Bank of 4 February 1997 No. VB-16-28/700, 11, VE-4-07/2n(4.02.97), 405
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