Limits established by Law
According to Law on Taxes and Fees, the taxpayers, except natural persons which are not individual merchants, by 15th day of each month in accordance with procedures stipulated by the Cabinet of Ministers, report all cash transactions with their counterparties (irrespective of whether the transaction involves a single operation or several operations), the amount of which exceeds 1500 euros.
The taxpayers, except natural persons who are not individual merchants, are prohibited to perform cash transactions the value of which exceeds 7200 euros (irrespective of whether the transaction involves a single operation or several operations).
The mentioned restrictions as well as the obligation to report cash transactions also apply to natural persons which are registered in the State Revenue Service as persons carrying out business activity and are engaged in cash transactions in carrying out their business activities.
The taxpayers, who carry out the business activity, in accordance with the procedures established by the Cabinet of Ministers, by February 1 following the tax year, report all cash transactions carried out during the past year with natural persons which are not required to register their business activities, if the amount of a single transaction with each counterparty exceeds 3000 euros.
Therefore the taxpayers have to declare mutual cash transactions every month till 15th date for performed cash transaction in the previous month.
Taxpayers who perform business activity have to submit the declaration once per year – until February 1.
If remuneration according to Service agreement is paid out in cash exceeding 3000 euros, declaration duty has to be fulfilled.
For payment of dividends are no restrictions in the limit of cash, but declaration duty has to be fulfilled.
According to Administrative Violations Code, in the case of failure to declare transactions carried out in cash, fine shall be imposed.
Furthermore, State Revenue Service has the right to apply the prohibition to the tax payer to perform cash transactions, if the tax payer has not covered late tax payment.
State Revenue Service has the right to suspend the business of the taxpayer (or its structural unit in which infringement has occurred) if at least one of the following infringements is identified:
- taxpayer employs persons without concluding employment contracts with them, and the proportion of such persons is 50 % or more, but not less than three persons of the persons employed in the object which is audited;
- taxpayer has evaded taxes or fees;
- taxpayer uses cash registers, a cash system, specialized device and equipment software or accounting information system the software of which has been changed or other activities have been carried out thereby creating an opportunity to conceal or reduce the taxable base on which taxes and fees are levied;
- taxpayer disburses income which is not recorded in the accounting registers and in the report on mandatory national social security contributions, personal income tax levied on earnings of employees and State fee of the business risk for the reporting month submitted to the State Revenue Service to the person employed, or employs more than one person without concluding employment contracts;
- taxpayer has not eliminated the infringements which caused its removal from the register of value added tax payers of the State Revenue Service.
Persons of Risk
To provide that the taxpayers treat tax payments responsibly, on full amount and on time, State Revenue Service forms the list of persons of risk.
Persons of risk are natural persons who conform to at least one of the following criteria:
- person has agreed to be a member of the board of directors of the commercial company without the purpose of performing commercial activity;
- the address of the declared place of residence of the person conforms to the term “risk address”;
- the person is or has been an official in the commercial company and during the time when he or she fulfilled the official duties such circumstances set which were the grounds for suspending economic activity of the commercial company, or two years have not elapsed from the day when the State Revenue Service took the decision to suspend economic activity of the commercial company;
- the person to who as a result of performing economic activity has occurred late tax payments which exceed 7000 euros;
- the person is or has been an official in the commercial company, and during the time period when he or she fulfilled official duties the commercial company has occurred late tax payments which exceed 15 000 euros.