Tax authority to cancel fines for late declarations

A new penalty regime of the tax authority is entering into force for thousands of taxpayers and businesses who have already submitted (or will submit in the future) late tax declarations to the tax administration. The Ministry of National Economy and Finance is correcting a long-standing distortion in the Tax Procedures Code by significantly limiting the cases in which administrative fines of €100, €250, or €500 are imposed for each reporting omission.

The exemption will cover taxpayers who, as is frequently identified through cross-checks by the Independent Authority for Public Revenue (AADE), either fail to submit a declaration or subsequently submit it with delay, provided that no tax is due or the amount involved is very small.

End of “heavy” fines for formal omissions

The key change introduced (under Article 37 of the law) is that the tax administration will no longer indiscriminately impose fines on those who omit or delay the submission of certain declarations. The provision does not abolish penalties for late submissions in general; however, it rationalises or eliminates fines for formal violations that have no revenue or fiscal impact. The changes take effect immediately upon publication of Law 5301, as of 15 May 2026. Furthermore, for those who have already paid such amounts, the law provides for reimbursement, retroactively from 2024.

Who is exempt from penalties

Under the new framework, according to Article 37 of the law as now in force, no penalty will be imposed in the following main categories:

• Late initial income tax returns, where the resulting assessment is zero or credit, or where the tax due does not exceed €100.
• Late “informational” declarations that do not generate any tax liability.
• Late initial or amended indirect tax, fee, or contribution declarations (excluding VAT and property transfer tax), where the tax due does not exceed €100.
• Late withholding tax declarations (excluding gambling tax declarations) if the amount due does not exceed €100.

In addition, penalties will not be imposed on late declarations submitted on behalf of minors, or by adults for obligations relating to a period during which they were minors. The exemption also covers parents’ income tax returns to the extent that they include income attributable to a minor child.

For late VAT returns, the penalty remains in place; however, where no tax is due, it is reduced to €100, instead of €250 or €500 depending on the category of taxpayer or business. Furthermore, the €100 penalty for special VAT regimes is abolished.

Exemption also applies to amended returns submitted to correct errors in initial filings. No penalties will be imposed in the case of:

a) late amended income tax returns for individuals or legal entities, where the additional tax due compared to the initial return does not exceed €100;

b) late amended VAT or withholding tax returns, provided that the original return was submitted on time.

Refunds and retroactive application

The new provisions will apply retroactively from 19 April 2024. For cases where fines have already been assessed and paid, the amounts will not be retained by the tax administration but will be refunded. The Independent Authority for Public Revenue (AADE) is expected to issue instructions on the cancellation or reduction of fines imposed over the past two years, as well as on the offsetting or refunding of amounts paid.

In practical terms, if at the time the law enters into force a penalty has not yet been assessed or collected for such violations, the process will be discontinued and the amounts will not be pursued for collection. A similar procedure will apply where penalties are reduced rather than fully abolished (e.g., reduced to €100 instead of €250–€500 for VAT declarations). The penalty assessment will be amended, the liability recalculated, and any undue amounts will be refunded or offset.