Appealing tax penalties differs from challenging the principal tax assessment and specifically focuses on reducing or annulling sanctions, fines, and interest. Georgian tax legislation provides for strict penalties for late filing of declarations, understatement of tax, failure to use cash registers, and other violations. In many cases, these fines are automatically accrued by software or are based on formal violations where the taxpayer had no intention of evading tax. The goal of this service is to prove that the penalty is disproportionate or that there are circumstances (e.g., force majeure, honest mistake) that mitigate or exclude the taxpayer's liability. Legal.ge offers the assistance of experienced lawyers who specialize in the legal analysis and annulment of tax sanctions.
This service concentrates on the following legal mechanisms:
- Legality check of the sanction: Analyzing whether the tax authority had a legal basis for imposing the specific fine (e.g., statute of limitations, procedural violations).
- Proving good faith: Disputing based on Article 269(7) of the Tax Code, which implies exemption from fines if the violation was caused by mistake/ignorance and did not result in damage to the budget.
- Proportionality of the fine: Arguing that the imposed fine is disproportionately high relative to the severity of the violation.
- Recalculation of interest: Clarifying the date the debt originated and writing off incorrectly accrued interest.
- Tax agreement: Negotiating for partial or full forgiveness of fines in exchange for paying the principal tax.
- Confirmation of force majeure: Proving that the failure to fulfill the obligation was caused by irresistible force (e.g., pandemic, natural disaster).
Cases are frequent where a declaration was sent late due to an accounting software error, resulting in a fine. Sanctions for incorrect issuance of waybills are also common, even when the actual movement of goods is confirmed. Businesses are often fined for late mandatory registration as a VAT payer, even when the turnover threshold was exceeded due to an extraordinary transaction. Another scenario involves customs fines for documentation discrepancies. In all these cases, if the taxpayer acted in good faith, there is a high chance of annulling the fine.
Appealing tax penalties relies on the provisions of the Tax Code of Georgia regarding liability and sanctions. Critically important is Article 269 of the Tax Code (general principles of liability), which grants discretionary power to exempt from sanctions based on the "principle of fairness." The General Administrative Code of Georgia and orders of the Minister of Finance on tax administration are also applied. Court practice often indicates that a merely formal violation, which did not damage the state's financial interest, should not be punished severely.
The process is identical to a tax dispute: a complaint is filed with the Revenue Service within 30 days of receiving the act. However, the emphasis is placed not on the correctness of the tax amount, but on the degree of the taxpayer's culpability. The lawyer prepares arguments on why the fine is unjust. Often, Dispute Resolution Councils use their discretion to annul fines for good-faith taxpayers, leaving only the principal tax. Lawyers represented on Legal.ge will help you place the right emphasis to minimize your financial loss.
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