It is important to analyze how to return the overpayment of taxes that the company paid by mistake. One should note right away that the features of the offset and refund procedure if the tax office collected a larger amount of money than was necessary are similar.
The question of how to return an overpayment of taxes arises quite often. Your company’s accountant may list more taxes overpayments & refund claims than required by tax law. The reasons may be different:
- Errors in the calculation of taxes – inaccuracy in the calculation of the tax base, the application of the wrong tax rate.
- Errors in filling out payment orders for the payment of taxes, penalties, and fines, resulted in their transfer to the budget in an excessive amount – an indication of an overestimated amount payable, an incorrect CSC.
- Introducing positive changes to the tax legislation, the effect of which is retroactive. For example, a tax overpayment may result from the introduction of a benefit that has been applied since the beginning of the current year.
- Based on the results of the tax period, the amount of tax to be reduced was calculated.
- Change in the taxation regime.
However, the features of the set-off and refund procedure if the tax inspectorate collected a larger amount of money than was necessary are similar. First of all, the tax authority credits the excess amount towards the repayment of your debts on taxes, penalties and fines. If there is no debt, you can use the excess to pay future tax payments or return it to your current account.
How to find out if a company has overpaid taxes
Before thinking about how to return an overpayment in taxes, you need to understand whether you have this overpayment. If the tax inspectorate independently reveals the overpaid amounts, it is obliged to inform you about them within 10 working days from the date of establishing the relevant fact. But, as a rule, the taxpayer himself declares the overpayment of taxes by sending an application to the tax office.
It is important to understand that an overpayment offset is possible only against the payment of a tax of the same type. This rule works like this: an overpayment of federal tax can only be credited against the payment of this or other federal tax.
For example, an overpayment of VAT can be offset against future income tax payments only in the part credited to the federal budget – 2%, but cannot be offset against property tax; overpayment of a regional tax can only be credited against the payment of this or another regional tax penalty on them.