§ 112. Decision on payment of tax arrears in instalments

(1) A tax authority shall make a decision to satisfy or to refuse to satisfy a request for the payment of tax arrears in instalments within twenty days as of receipt of the request. Upon making a decision, the tax authority may alter the schedule for payment of tax arrears submitted by the taxable person. Refusal to satisfy and partial satisfaction of a request shall be reasoned.

(2) Upon deciding to satisfy a request, the tax authority shall take into consideration the financial situation and economic indicators of the taxable person, the taxable person’s prior performance of obligations arising from Acts concerning taxes, the feasibility of the payment of tax arrears in instalments and, if security is required, the reliability of the security provided and the circumstances specified in subsection (4) of this section. The tax authority has the right to request that documents that are necessary to establish these circumstances be submitted. In such case, the tax authority shall make a decision on the request within ten days as of the submission of the documents.

(3) The tax authority has the right to request security upon the payment of tax arrears in instalments. Security shall not be requested from a taxable person who is bankrupt and whose tax arrears are to be paid in instalments in order to make a compromise in bankruptcy proceedings. A request for security shall be prepared in writing unless the obligation to provide security arises from law. If security is required, a decision on the payment of tax arrears in instalments shall be made within five working days as of the date on which the security is provided.

(4) A tax authority has the right to deny a request for the payment of tax arrears in instalments if:

1)  the request is not reasoned or is insufficiently reasoned, or

2)  the taxable person has been issued an order to pay the tax arrears within forty-eight hours as of the date of receipt of the order (§ 129), or

3) the taxable person does not keep accounts pursuant to the procedure provided by legislation, does not submit tax returns or does not preserve documents, or

4) the taxable person fails to provide the security required or the tax authority does not consider that the security provided is sufficient or trustworthy, or

5) upon consideration of the compromise proposal made by the person who owes arrears in bankruptcy proceedings, the tax authority finds that the financial situation of the debtor does not enable the person to perform the obligations assumed as a result of the compromise, or

6)  other circumstances or grounds exist which cause the tax authority not to consider the payment of the tax arrears in instalments to be expedient. 

§ 113. Revocation of decision on payment of tax arrears in instalments

(1)  If a taxable person does not meet the schedule for the payment of tax arrears, does not pay taxes which become due during the period of validity of the schedule on time, does not perform an obligation provided for in the Law of Property Act to keep a thing encumbered with a pledge in order to guarantee tax arrears or, in the event of a decrease in the value of security, does not submit replacement security accepted by the tax authority, the tax authority has the right to implement one or several of the following measures:

1) to revoke the decision on the payment of tax arrears in instalments;

2) to revoke a reduction in the interest rate (subsection 117 (2));

3)  to calculate interest retroactively at a rate established pursuant to subsection 117 (1) of this Act on the amount of tax which is being paid in instalments.

(2) A tax authority has the right to revoke a decision on the payment of tax arrears in instalments made in order to make a compromise if the compromise is annulled pursuant to the Bankruptcy Act.