Tax 

Remission of social security and health insurance sanctions

Removal of the harshness of law, i.e. penalty remission, is not only applied as part of tax proceedings. Very often, a penalty is imposed for late health insurance and social security payments. These penalties can reach very high amounts. On the other hand, these sanctions can also be remitted under the Act on Public Health Insurance and the Act on the Organisation and Implementation of Social Security. However, the remission of social security and health insurance penalties are subject to entirely different rules than the remission of tax sanctions.

The first essential step for the remission is meeting the deadline for filing an application for harshness removal. As soon as the applicant receives the relevant decision, there are necessary steps that have to be taken. It is also necessary to check which institution decides on the remission, which depends on the amount to be remitted. The application has to contain relevant reasoning to persuade the authority of the harshness of the sanction imposed and thus of the remission appropriateness.

The application has to include required elements and you should always check whether the institution (especially the health insurance company) provides an application form that has to be filled in. The forms are usually available on the health insurance companies’ websites.

Finally yet importantly, you have to take into consideration the regulation of public aid as part of the remitted penalty is regarded as de minimis aid under Commission Regulation (EU) No 1407/2013. For a successful remission, the applicant has to meet the conditions of this Regulation. Therefore, a statutory declaration on the de minimis aid has to be submitted together with the application. As a general principle and according to the Regulation, the aid may not exceed EUR 200,000 (in specific cases, a different limit may be set up) with the test period being the preceding three years.

In conclusion, it makes sense to defend against the amount of the penalty because the probability that a penalty will be reduced exists depending on the specific circumstances of the case.

Social Security dReport newsletter