The determination of insurance contributions involves linkage differentials and fines, calculated in accordance with section 364 of the National Insurance Law. Fines constitute, in part, a substitute for interests not imposed separately.
Submitting a request for fines reduction
A motivated request for fines reduction can be submitted on our website using this link (the request can be submitted without a representative).
The request shall be submitted within 30 days from receipt of the notification by registered mail regarding insurance contributions determination or the ruling on petition.
If a petition has been filed and the procedure is not over yet , the fines reduction request must be submitted after the end of petition procedure.
The decision of the National Insurance Institute on the fines reduction request is given in writing.
It should be noted that, during the review of the request, the debt is not frozen and continues to accrue fines and linkage up until the date of payment.
If the request for fines reduction is approved, we will credit the employer's account with the amount of the approved fines reduction, at the value date of the day the debt has been imposed originally.
Power of appreciation of the National Insurance Institute in fines reduction
Among the grounds and elements of appreciation in deciding the level of reduction of the fine, the following elements will be take into account cumulatively:
- Inspector's recommendation (up to 30%) - full cooperation with the deductions inspector during the audit and providing the material required for the audit will allow a reduction of up to 30% of the fine.
- Repeat deficiencies (up to 35%) - to promote the resolution of deficiencies, a fine reduction will be granted for a deficiency discovered for the first time. However, so long as the deficiency is not resolved by the date of the recurring audit, the fine will be reduced as follows:
- When the deficiency is discovered for the firs time and do not involve the employer's intent to avoid insurance contributions payment - a 35% reduction is granted.
- When the deficiency is discovered for the second time in the audit - a 20% reduction is granted.
- When the deficiency is discovered for the third time in the audit - a 10% reduction is granted.
- Economic situation (up to 25%) - a reduction of up to 25% will be allowed based on the economic situation according to following criteria:
- Turnover decrease - a decrease in turnover will be assessed based on income over the last 12 months (from the date of request) in comparison with the previous 12 months:
- If the decrease in income reaches up to 10% - no reduction is granted.
- If the decrease is between 11% and 25% - a reduction of 10% is granted.
- If the decrease reaches 26% and above - a reduction of 20% is granted. - Decrease in average number of employees - will be assessed over the last 12 months (frim the date of request) in comparison with the previous 12 months.
- For a decrease of up to 15% in the number of employees - no reduction is granted.
- For a decrease of 16% and above - a reduction of an additional 5% is granted.
- Special reasons (up to 10%) - the National Insurance Institute will consider an addition reduction of up to 10% of the fine for special reasons, such as:
sending an deduction assessment agreement at the initiative of the employer and prior to a petition procedure, or resolving a deficiency during the current audit period or following the audit. - Audit of the sixth and seventh year (up to 7%) - after the above reductions, additional consideration will be given to the elements below:
- If the year of imposition with respect to the year of implementation of the determination is the sixth year - an additional reduction of 4% of the fine is granted with respect to the impositions related to that year.
- If the year of imposition with respect to the year of implementation of the determination is the seventh year - an additional reduction of 7% of the fine is granted with respect to the impositions related to that year.
All information about fines reduction is detailed in the Circular "fines reduction - deductions audit" 1.2.2021.