What happens if the authorisation is granted but the taxpayer does not pay?

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When a taxpayer fails to make a payment under an approved tax deferral or instalment plan, the consequences depend on whether the arrangement is a deferral or an instalment plan, whether the application was filed during the voluntary or enforcement period, and, for instalments, the scope of the guarantees. The current rules are mainly in Article 54 of the General Collection Regulations (RGR); they do not generally require the former “certificate of uncovered debt” described in older accounts.

Deferral. If the application was filed during the voluntary payment period and the taxpayer does not pay by the granted due date, the enforcement period begins on the following day and enforcement proceedings must be initiated. The tax authorities may claim the principal, late-payment interest calculated from the day after the original voluntary payment deadline until the granted due date, and the enforcement-period surcharge on the total of those amounts. If the application was filed during the enforcement period, enforcement proceedings continue.

Instalment plan with a full waiver of guarantees or a guarantee covering all instalments. If the missed instalment includes debts that were already in the enforcement period when the application was filed, enforcement continues for those debts. The debts covered by the plan that were then in the voluntary period enter the enforcement period on the day after the missed instalment’s due date. Where the missed instalment includes debts that were in the voluntary period, enforcement proceedings are initiated for that instalment, and the authorities may claim its amount, interest accrued up to its due date, and the enforcement-period surcharge on their sum. If the amounts claimed are not paid within the period under Article 62(5) LGT, the remaining instalments become due and enforcement proceedings are initiated for all the debts, with interest calculated under Article 54(2) RGR.

Instalment plan secured by partial, separate guarantees. Failure to pay makes the instalments covered by the relevant guarantee due, subject to the rules in Article 54(3) RGR. The plan remains in force for instalments not covered by that guarantee. Accordingly, failure to pay one instalment does not necessarily make every other instalment due.

Guarantees are enforced under Article 74 RGR after the applicable statutory payment periods. Where a plan has a partial waiver of guarantees or the guarantees later prove insufficient, enforcement proceedings may continue without waiting for the guarantees to be enforced; any subsequent insufficiency must be reasoned in the file.

Legislation: Articles 26, 28, 62(5), 65(5) and 161 LGT; Articles 53(3), 54 and 74 RGR.