Amendment to Tax Procedure Code heading to the Senate – summary of major changes

An amendment to the Tax Procedure Code has passed the Czech Chamber of Deputies in its third reading. According to the Minister of Finance, the amendment will allow for the implementation of an online tax authority, formed on the ground plan of a tax information box. The amendment introduces several changes that will affect the lives of almost all taxpayers. A positive piece of news is that after amending proposals the amendment now does not include some changes previously subject to heavy criticism.

The major changes introduced by the amendment are as follows:

  • The deadline for filing tax returns for annual taxable periods shall be automatically extended to four months if tax returns are filed electronically.
  • Advances for VAT deduction will allow the tax authority to refund parts of excess deductions not subject to review.
  • The deadline for refunding excess deductions (typically relating to VAT) will be extended from 30 to 45 days; under transitory provisions, the new deadline will apply to taxable periods for which the deadline for filing tax statements expires after the amendment’s effective date.
  • A personal discussion over a tax inspection report will be replaced by a notice of termination of a tax inspection; a personal discussion on the commencement of a tax inspection by the delivery of a notice of commencement of a tax inspection specifying its scope.
  • If the tax administrator has not called on the taxpayer to file an additional tax return before commencing a tax inspection, this will not result in the unlawfulness of the entire tax inspection.
  • Entrepreneurs – individuals will be allowed to apply for the allocation of a new tax identification number that will not include their birth certificate number.
  • The system of interest paid by both taxpayers and tax administrators will change in its entirety.

Based on the deputies’ amending proposals, the tolerance period for a late submission of a tax statement will not be cancelled. The deputies have only cancelled the tolerance period applicable to late tax payments. In practice, this means that the late filing of a tax return within five working days will not result in the imposition of a penalty; however, the related tax will have to be paid within the set deadline. Default interest will start to accrue as early as from the first day after the date on which the tax is payable. In the Ministry of Finance’s opinion, this is compensated by an increase in the minimum threshold from CZK 200 to CZK 1 000: if interest for one taxable period does not exceed the minimum threshold, taxpayers do not have to pay it.

Another novelty compared with the original proposal is the regulation of prescribed forms used for tax filings, responding to the Constitutional Court’s case law. The new regulation explicitly stipulates the scope of information that can be required by registration and tax assertion forms. The content and structure of individual forms is determined by the Ministry of Finance’s decree.

On 24 February, the amendment passed on to the Senate, which must respond within 30 days. Its effectiveness will depend on the course of other legislative processes; however, considering the speed in which it went through the second and third reading, we expect that it will be promulgated in the Collection of Laws soon.

Sdílet článek