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Handbook for taxpayers

Handbook for taxpayers in connection with coronavirus disease

What can taxpayers do?

From Monday 16 March 2020, the taxpayers may defer some payments by requests for deferment of payment of taxes, requests for adjustments (reduction) of advance payments or for exception from its payments, requests for remission from sanctions in the event of late payment, requests for extending the time period for submitting of some tax returns. Newly, the taxpayers will be allowed to deduct their tax loss retrospectively in the preceding years.

  • Deferment of payment of taxes
    • The information of the General Financial Directorate to the deferment of taxes is available HERE (Information in Czech)
    • In the case of the request for deferment of payment of taxes the administration fees are remitted for all requests submitted by 31 July 2020
  • Adjustment (reduction) of advance payments or exception from its payments
  • Remission from sanctions in the event of late payment
    • The requests may be submitted according to the Guidelines published by the General Financial Directorate in The Financial Newsletter (Information in Czech)
    • The remission from fines for late submission of tax return is granted generally for all taxpayers, provided that the interest on late payments is remitted at least partially or the deferment of payment of taxes is granted (based on an individually submitted request)
    • Administrative fees paid to Tax Administration and to Customs Administration are remitted newly for all requests for remission from sanctions for late payment submitted by 31 July 2020
    • The information of the General Financial Directorate to the remission of interests is available HERE (Information in Czech)
  • Extending the time period for some tax returns
    • For personal and corporate income tax returns, it is not necessary to request an individual extension of the deadline by 1 July 2020
    • For real estate transfer tax return with the time period for submission of tax return expiring in the period from 31 March 2020 to 31 July 2020, it is not necessary to request an individual extension of the deadline by 31 August 2020
    • The request for the extending the time period is not applicable by VAT (see below)

How the general pardon of the Finance Minister provide reliefs for taxpayers?

Taxpayers need not to submit the Corporate Income Tax return, Income Tax returns by individuals and Settlement of withholding tax for the period of 2019 by 1 April 2020. It is sufficient if they submit this tax return by 1 July 2020 at the latest. This applies fully automatically without submitting any request.

Generally granted will be the remission from advance payments of income tax by individuals and corporate income tax made in June. The advance payment in June (i.e. the second advance payment by quarterly payers and the first advance payment by half-yearly payers), will not be paid at all. The remission of advance payments does not mean the remission of the tax itself.

The generally granted remission also concerns the Real Estate Transfer Tax. Related to the period from 31 March 2020 to 31 August 2020, if the real estate transfer tax return is submitted and the tax or advance payment for this tax paid by 31 August 2020, all sanctions, related to this late payment, will be remitted (i.e. fine for late submission of tax return, interest on late payment or interest on deferred payment).

If it is not possible to submit the VAT control statement within the deadline, the fines for late submitting will be solved as follows:

  • Without a call from the tax administrator, fines for late submission of VAT control statement of CZK 1,000, arisen in the period from 1 March to 31 July 2020, will be automatically remitted.
  • Some additional fines for late submission of VAT control statement during this period will be remitted at the payer´s individual request for reasons related to coronavirus.

If VAT return is submitted late, the following steps will be taken:

  • In addition to the remission from fine for late submitted tax return granted generally for all taxpayers under the conditions set out above, there is also an automatic remission from the fine for the late submission of tax returns also for payers who, based on an individually submitted request, were at least partially remitted a fine for not submitting the VAT control statement (CZK 10,000; 30,000; 50,000) due to coronavirus spread. Assuming that, this late tax return will be submitted no later than the day when the related VAT control statement was submitted.

How is it with Registration of Sales (EET) during coronavirus crisis?

The Ministry of Finance introduced a special Act No. 137/2020 Coll., on certain adjustments in the field of registration of sales in connection with the state of emergency, which stops the requirement to keep registration of sales (EET) during the state of emergency and succeeding three months. During this time no taxpayer is required to keep registration of sales and this obligation would not be examined by the authorities. The aim of this step is to reduce visits of Tax Offices by taxpayers that shall start keeping their registration of sales. It aims to prevent inconvenience due to ensuring technical support or updating certificates for taxpayers that already keep the records.

What are we preparing for the taxpayers?

The Ministry of Finance will prepare an amendment to the Income Tax Act, according to which the taxpayers will be allowed to deduct their tax loss retrospectively in the two preceding years. Therefore, in the case of loss in personal income tax or corporate tax for taxable period beginning the year 2020 it will be possible to deduct this loss from the tax base for taxable periods of 2019 and 2018, which will for the taxpayers lead to recovering the tax for these years. The loss could be deducted based on submitted additional tax return for 2019 and 2018. The overpayment on income tax will be returned based on the taxpayer´s application.

What do we recommend to the taxpayers?

The taxpayers should prefer other than personal contact with the Tax Administration and use the remote forms of communication as much as possible, i.e. to file the tax returns using data box, using application Electronic filing for the Tax Administration (Elektronická podání pro Finanční správu, Information in Czech) or postal services. From Tuesday 24 March 2020 the offices of Tax Administration are accessible to the public only on Monday and on Wednesday from 8:00 to 11:00 a.m.

What can the taxpayers expect?

The taxpayers can expect friendly policies of the Tax and Customs Administration. Due to this reason the Tax Administration modifies its guidelines for remission and has issued a new Guidance D-44, that extends Guidance D-21 and D-29 for further justifiable reason related to measures against spreading the coronavirus. The full wording of the general pardon (so called ”Tax Liberation package“) and Guidance D-44 are available in the Financial Newsletter (Finanční zpravodaj – Information in Czech).

Where the taxpayers can find further information?

New telephone information lines were set up, the lines will operate during work days from 9:00 a.m. to 5:00 p.m. and can be used for answering questions related to the current situation measures. The crisis info-line of the Tax Administration is available at telephone number 225 092 392. Overview of each tax regulation, its impact and other regularly updated information regarding coronavirus are also available at specialized web sites of the Ministry of Finance (Ministerstvo financí – Information in Czech) and the Tax Administration (Finanční správa – Information in Czech).

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