In order to interpret tax accounts correctly, it is useful to be aware of some of the basic principles on the basis of which the NTCA keeps tax accounts and records individual items. These include, but are not limited to:
- one taxpayer one tax account: the NTCA keeps tax accounts for each taxpayer. Each taxpayer has only one single tax account. The office records that tax account linked to the tax identification code for sole traders and individuals and to the tax identification number for other taxpayers.
- settlement when payment is due: if less than the required amount has been paid for a type of tax, the payment is always accounted for in the order in which it is due, i.e. always for the earliest debt. There are, however, some exceptions where the payment can only be credited to a specific liability, mostly related to a customs procedure.
- annual closing: tax accounts are kept by the NTCA on an annual basis. They must provide a permanent, "final" status for which there is no retrospective accounting. With this in mind, tax accounts can also be queried on an annual basis. At the year-end closing and opening, the liabilities and cash flows for the closed period are aggregated by tax type. This ideally results in an orderly, zero balance, but it can also reflect a debt or overpayment. The balance appears as the "opening balance" for the current period, with a date of 1 January. This ensures that the aggregated balance of items from previous periods is always reflected in the current tax account balance.
- the assessment of the net late payment surcharge (also known as default interest): late payments will be penalised by the NTCA with a late payment surcharge (default interest) in line with the central bank's base rate. The late payment surcharge is calculated and imposed by the NTCA under a standardised procedure based on the data in the tax account.