The basic deadlines for filing income tax returns for the 2021 calendar year already passed on 1 April or 2 May, where the three-month or four-month deadline for electronic filing is concerned, respectively. The final statutory six-month deadline, applying to returns filed by taxpayers subject to a statutory audit or those filed by tax advisors, will expire as early as 1 July. What to do if even the six-month deadline does not seem realistic for managing the preparation of a tax return, or if a return should have been filed earlier but for whatever reason was not?
The situation of taxpayers who fail to file a tax return although they are obliged to do so and are subject to the three-month or four-month deadline has been considerably eased by an amendment to the Tax Procedure Code in effect from 2021. Under the amendment, taxpayers are no longer obliged to submit to the tax authority a power of attorney granted to a tax advisor within the basic (and shorter) deadline for filing a tax return to extend the deadline to six months.
To extend the deadline to six months, it is sufficient for the tax advisor or attorney to file the return based on a power of attorney after the expiration of the basic deadline. Therefore, if you missed your three-month or four-month deadline for filing your 2021 return, you can grant a power of attorney to your tax advisor or attorney and ensure the timely filing of your income tax return through them.
For taxpayers who are subject to the extended six-month deadline and already slightly apprehensive about the 1 July deadline, the Tax Procedure Code allows for an extension of the filing deadline. In fact, at the request of the taxpayer, which must be made before the expiry of the six-month deadline, the tax administrator may grant an extension of up to three months. If the subject of the tax includes income taxed abroad, the tax administrator may grant an extension of the deadline for 10 months from the end of the taxable period.
The application for extension of deadline has no prescribed form or template, but there are elements that must be included. The application also entails the obligation to pay an administration fee of CZK 300 and provide proper justification for the request. The reasons for extending the deadline may include, e.g., the unfinished audit of the financial statements or unclosed accounts due to significant organisational or personnel changes. Another reason may be significant foreign aspects affecting the preparation of the income tax return, such as the above-mentioned income subject to taxation abroad.
However, the deadline extension is not enforceable, and it is purely at the discretion of the tax administrator whether and to what extent to grant the request. Moreover, the approach of individual tax administrators to such requests is far from uniform.
Even if the extension request is not granted by the tax authority, there is a way to get the necessary time to thoroughly prepare the tax return: taxpayers may opt to file a proper return in its best currently possible form and pay the relevant tax on time, subsequently correcting both through a supplementary return. With the right combination of the amount of tax paid, the tax originally declared and the timing of the supplementary return, it may even be possible to minimise any associated sanctions.