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Penalty Fees for a Late Tax Return Submission

Late tax return submissions result in penalty fees.

Many taxpayers avoid filing a tax return even though statistics show that they are likely to result in a tax refund. Those who are required to file must meet a deadline of July 31st each year; however, the deadline is often missed resulting in lateness penalty fees.

Section 46 of the Income Tax Act (Einkommensteuergesetz) regulates who is required to file their tax return by July 31st. This typically applies to tradespeople, freelancers, and employees with multiple jobs and sources of income.

Exceptions for the 2018 tax year

As the July 31st deadline was introduced during the 2018 tax year, those who filed late in 2019 often didn’t receive a lateness penalty fee. The official processing the tax return decided whether a lateness fee was charged and how much was due. The maximum lateness penalty fee possible amounted to 10% of one’s tax burden and capped at 25,000 euros. The “optional” penalty only applied until February 2020, when the transitional period ended and late fees became mandatory instead of at the official’s discretion.

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Changes as of 2019

Anyone who fails to meet their tax return deadline is subject to a lateness penalty fee. At least 25 euros are due for each month that the tax return is late and is directly added to the tax burden or deducted from the tax refund. If the tax burden exceeds 10,000 euros, a higher lateness penalty fee is applied. Up to 0.25% of the tax burden can be added each month reduced by any advanced payments and tax deductions.