What are the consequences if I do not pay the trade tax?
April 17, 2022 | 40,00 EUR | answered by Simon Schaaf
Dear tax advisor,
My name is Leonie Otremka and I run a small business. In recent months, my financial situation has been very difficult, and I am having trouble paying the trade tax. I am wondering what consequences it could have if I do not pay the trade tax.
Currently, my business is doing well, but due to some unexpected expenses, I am struggling to cover my ongoing costs. I am afraid that not paying the trade tax could lead me into financial difficulties and possibly force me to declare bankruptcy. I would like to know what consequences it could have if I do not pay the trade tax on time.
I am worried that by not paying the trade tax, my business could get into legal trouble. I have heard that not paying taxes on time can result in high fines and other legal consequences. That is why it is very important for me to be informed about the possible consequences in order to act in a timely manner.
Can you please explain to me what consequences it could have if I do not pay the trade tax? Are there ways to resolve the situation and avoid negative consequences? I am grateful for any help and advice.
Thank you in advance.
Kind regards,
Leonie Otremka
Dear Mrs. Otremka,
Thank you for your inquiry regarding trade tax and the associated consequences if it is not paid. It is understandable that you are concerned, especially if your company is already facing financial difficulties.
If you do not pay the trade tax on time, it can indeed lead to various consequences. Firstly, the tax office will usually send reminders and payment requests to prompt you to pay. If you still do not pay, further measures can be taken.
One possible consequence is the imposition of late payment penalties. The tax office can impose a surcharge of 1% for each month in which the tax has not been paid. These surcharges can quickly add up and significantly increase the tax debt.
Furthermore, the tax office can also initiate seizures to collect the outstanding tax debt. This means that the tax office can access your assets, accounts, or even your receivables to settle the tax debt.
In particularly severe cases, it may even lead to an insolvency filing. If you cannot pay the trade tax and other debts exist, there is a risk that creditors may initiate insolvency proceedings against your company.
It is important to note that non-payment of taxes can also have criminal consequences. If the tax office suspects tax evasion, a tax evasion report can be filed, which can result in high fines or even imprisonment.
To avoid negative consequences, it is advisable to contact the tax office early and find an individual solution. For example, you can request installment payments or deferrals to gradually settle the tax debt.
I strongly recommend consulting with a tax advisor or lawyer to clarify your situation and discuss possible measures. Together, we can find a solution to stabilize your financial situation and avoid negative consequences.
I hope that I was able to help you with this information and am available for further questions.
Best regards, Simon Schaaf, Tax Advisor
