Supreme Administrative Court as last resort
The Supreme Administrative Court with which taxpayers may lodge cassation complaints is in principle the last resort for a substantive review of decisions of the Appellate Financial Directorate after a taxpayer’s unsuccessful defence before the regional court. The Supreme Administrative Court is only supervised by the Constitutional Court, which views matters from a significantly different perspective.
A cassation complaint is a remedy against the final and conclusive decision of a regional court in the administrative procedure and can only be filed on grounds provided for by law. These include, for example, unlawfulness consisting in the incorrect assessment of a legal issue by a regional court, the non-reviewability of a decision due to its incomprehensibility, or irregularity of court proceedings (mistrial). These grounds can, however, be claimed against any regional court decision, and cassation complaints can thus be lodged against almost all decisions of the regional court in tax-related disputes that uphold the ﬁnancial administration and with which taxpayers therefore disagree.
A cassation complaint is filed directly with the Supreme Administrative Court but can also be filed with the regional court that issued the challenged decision. The time limit for filing the complaint is only two weeks from the date of receipt of the regional court's decision, which is very short, given that the taxpayer must be represented by a lawyer, with a few exceptions. It is not only for this reason that we recommend that the taxpayer be already represented by a lawyer in the proceedings before the regional court, as this removes having to deal with representation to lodge the cassation complaint in haste.
Unlike an action, a cassation complaint filed within the two-week deadline may have the form of a so-called blank complaint, i.e., only including the statutory essentials (identification of the parties involved, identification of the decision being challenged, etc.) without providing specific arguments for filing the complaint. The Supreme Administrative Court will then invite you to complete the complaint, for which it will set a one-month deadline. This can give you up to about two months to prepare your complaint.
Similarly to an action, the filing of a cassation complaint also involves a court fee of CZK 5,000. Just as in an action against a decision of the Appellate Financial Directorate, the court fee is not based on the amount in dispute, unlike in civil litigation. Another important difference in the cost of court proceedings compared to civil litigation is that in the event of an unsuccessful cassation complaint, the taxpayer is not obliged to pay the costs of the opposing party, i.e., the ﬁnancial administration. This is also true vice versa: in the event of a successful cassation complaint, the taxpayer, or their legal representative, is awarded a fee in accordance with the lawyer's tariff, which for renowned law firms is not sufficient to cover the actual costs of legal representation.
In conclusion, it should be noted that the appeal is not intended only for taxpayers who disagree with the regional court's decision. It may also be lodged by the ﬁnancial administration for the same reason. According to statistics, the financial administration filed a total of 159 cassation complaints in 2021. In the same year, the SAC decided on 95 cassation complaints filed by the ﬁnancial administration, of which only 58 were upheld. This is a dismal success rate in international comparison, for which the ﬁnancial administration is often rightly criticised.
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