Failing to comply with a formality will bring a monetary penalty. 

Being familiar with most common types of infractions can help the ‘autonomo’ to avoid them. 

In the most frequent cases the reasons for a fine are:

• failing to pay a tax due in the legal time,
• altering a tax result by deducting wrong concepts
• applying for an undue refund. 

In all these cases the wrong can be quantified by a figure that needs to be paid or compensated. This figure is the basis  for calculating the fine which, depending on the seriousness, can range between 50% to 150%.

Types of infringements and the corresponding fines. 

 The breach of the obligation may be considered Slight , Serious or Very Serious. 

Slight 

When the base does not exceed 3,000€ whether or not there has been concealment in information.

When the basis of the penalty exceeds 3,000 euros and there is no concealment of information.

Penalty: proportional fine of 50%.

Serious

When the basis of the sanction exceeds 3,000 euros and there is concealment.

Whatever the amount , if the following circumstances occur the infringement is considered serious: 

Incorrect documents have been used to reduce the tax debt.

The tax debt is result of incorrect accounting or keeping of books.

Penalty: proportional fine of 50% to 100%, which will be graduated according to the criteria of repeated commission of tax infringements and economic damage to the Public Treasury.

Very Serious. 

When fraudulent means have been used.

Penalty: proportional fine of  100% to 150%, which will be graduated according to the criteria of repeated commission of tax infringements and economic damage to the Public Treasury.

Once the fine has been stablished other factors can reduce the amount to pay: 

• Compliance. If the individual manifests his or her compliance with the fine, and therefore does not file a formal appeal, the fine will be reduced in 30%.
• Once the reduction for compliance has been applied, the fine with have an additional reduction of 25% of the result to pay if it is paid in the voluntary period. 

Example: 

A breach quantified in 3000€, and considered slight will result in :

50% of 3000 = 1500€ fine. 

Compliance reduction of 30% will leave the amount to pay in 1200€

(Compliance is assumed when no objection is presented )

Additional reduction if paid in time ( 25% )would result in: 900€

Off course, in this example, the 3000€ unpaid tax needs to be settled too. 

We will receive letters, first claiming the payment of the tax due and then initiating the penalty procedure. If the fine, is not paid in the voluntary period then the 25% will be claimed too.

Some frequent infringements. 

These are the reasons for most people getting the fine.

Failing to pay the tax in the legal period. 

 To avoid this be alert to the quarterly deadlines. From LimitConsulting we send reminders of when to act in every case. 

 Failing to file complete information or necessary documents.

 Learn the formalities of a self employed or company here. 

 Unduly obtaining refunds. 

Some times requesting a rebate, such as VAT rebate, trigger a review of the books to verify that this is legitime. Keeping  tidy and neat books  will be of great help to make sure that the refunds are obtained without problems. Follow the guidelines of your adviser 

Unduly requesting refunds, tax benefits or incentives 

This is especially relevant in the time that, due to the amount of applications, the administrations have been granting the Covid-19 benefits without checking if all requisite were met. 

A revision of the cases later will reveal if the request was legitimate. 

LimitConsulting assists tech oriented entrepreneurs with administrative, tax and accounting support in order to avoid common mistakes and omissions and keep control of their business. 

We provide access to online software where they can invoice, keep track of their payments and collections, and much more. With our support and experience starting up a business is much easier!