ZAGREB, Dec 20, 2020 – A total of HRK 15.5 billion in tax debt, including HRK 6.8 billion on account of principal and HRK 8.7 billion on account of interest, owed by 346,570 taxpayers, has been written off since 2017 because the debt became time-barred, the Vecernji List daily wrote on Sunday.
The fact that a large part of the written-off debt is on account of interest shows that these are debts for which the Tax Administration kept data in tax records but for which it was not possible to enforce debt collection due to lack of assets, it was said in response to the daily’s question. The daily had asked the Tax Administration for data on the total number of time-barred tax debts, the amount that had been written off because of that, and whether there was a need for any normative or organisational intervention in the tax system.
The data submitted is from 2017 because as of 1 January that year an important systemic change has been in force. Since then the statute of limitations for the right to collect taxes has been monitored ex officio, so taxpayers no longer have to submit a request.
Any tax debt that was not collected after six years, through the taxpayer’s application or a decision of the tax authority, is written off from tax records.
As of 2017, if a tax debt has not been collected using all available enforcement proceedings during six years or if the debt is not secured by a pledge or mortgage, the tax authority is obliged to write off the time-barred debt from tax records.
Based on this, the Tax Administration conducts a systemic debt write-off once a year for debts that fall under the statute of limitations on 1 January that year.
