On 4 December 2019, the Federal Tax Administration (FTA) published Circular 48 on the forfeiture of withholding tax refund claims of individuals.
According to the circular 48 Forfeiture of the right of natural persons to a refund of withholding tax pursuant to Article 23 of the Withholding Tax Act in the version of 28 June 2008, the tax authorities of the Federal Republic of Yugoslavia are entitled to forfeit the right to a refund of withholding tax. As of 1 September 2018, the obligation to declare (condition for refund of withholding tax) is deemed to have been fulfilled even if the income subject to withholding tax has not been declared in the tax return, but has been subsequently declared by the taxpayer in an assessment, audit or after-tax procedure that has not yet been legally concluded, or has been added to the income or assets by the competent tax authority on its own determination (Art. 23 para. 2 VStG). The prerequisite for this is that the declaration of the tax factors has only been negligently omitted.
The new circular defines negligence as carelessness contrary to duty, taking into account circumstances and personal circumstances (education, experience, intellect). If the negligent non-declaration can be seen from the files, the tax authority grants the refund without further verification. Otherwise, the taxable person must demonstrate, or at least credibly demonstrate, that the omission was negligent. The destruction of the claim for reimbursement after 3 calendar years (Art. 32 para. 1 VStG) and the new 60-day period under Art. 32 para. 2 VStG continue to apply unchanged. The newly inserted paragraph 2 of Art. 23 VStG can also be applied to assessments at the discretion of the tax authorities. Finally, the notification procedure under Art. 23 para. 2 VStG is not excluded if all other conditions are fulfilled.
The new paragraph 2 of Article 23 VStG is applicable to claims since 1 January 2014 which have not yet been finally decided (Art. 70d VStG). Circular No 40 continues to apply to cases covered by the old law.
The circular letter is available here.
