Penalties for VAT ledger statements: new waiver options
The General Financial Directorate (GFD) is expanding options to waive penalties for the failure to file VAT ledger statements, or for their late filing, amounting to CZK 10, 30 or 50 thousand. It will be possible to waive up to two penalties for 2016 irrespective of the cause of default; in 2017, it will be one penalty.
In early March, the GFD published an appendix to Instruction D-29 on the waiver of penalties for the failure to file a VAT ledger statement. The instruction extends the scope of justifiable reasons for non-filing a VAT ledger statement after the taxpayer is called on to do so by the tax authority. The financial administration is thus trying to accommodate VAT payers who previously were automatically charged for a few days’ default with high penalties with amounts set directly by law.
New waiver options primarily relate to penalties charged for the non-filing or late filing of VAT ledger statements in connection with the tax authority’s call. Taxpayers who committed only two breaches in 2016 may ask for the waiver of both penalties, irrespective of the cause of wrongdoing. Only one penalty will be waived in this manner in 2017.
Following the Constitutional Court finding email notices purportedly effective once sent to be unconstitutional, related penalties continue to be waived. Under certain circumstances, the tax authorities will also be more lenient towards defaults shorter than five working days. Some of the reasons for waiving penalties will only be applicable to 2016 and 2017. The GFD expects to issue other updates to reflect up-to-date developments.
The GFD’s appendix does not change the waiver application process, which will continue to include several phases. First, the tax authority will examine whether the applicant has seriously breached accounting and tax regulations, second, whether justifiable reasons exist and, finally, to what extent the taxpayer has violated tax obligations in the past. Breaches that half the penalty amount that can be waived will no longer include the failure to file a VAT ledger statement.
Please note that an application for the waiver of a penalty is subject to an administrative fee of CZK 1 000 and must be filed within three months of the date a relevant payment order entered into legal force. Once conditions for the waiver of up to two penalties for 2016 or one penalty for 2017 are met, applications for the waiver will not have to include any detailed reasoning, irrespective of the cause of wrongdoing. Nevertheless, formal waiver applications must be filed and the respective fees paid. Waivers will not be automatic, unlike the demise of the one-thousand-crown penalty for the late filing of a VAT ledger statement.