Imagine this scenario: The tax authority found certain discrepancies in your tax return. There is a risk that the asserted tax could be increased. But the inspection is dragging on for years with no end in sight. How long can the tax authority change the tax you have declared? On what conditions? And what if, the other way round, you find out that the tax you paid should have been lower?
The key term in this respect is the deadline for assessing tax. This period is three years, after which the assessed tax cannot be changed, which applies even if the taxpayer finds that the tax should have been lower. The deadline may be extended under certain conditions. However, it will always expire no later than ten years after its commencement.
How is the deadline determined?
The deadline for assessing tax begins to run on the day when the deadline for filing a regular tax return expires. If the taxpayer had no obligation to file a tax return, the time limit begins to run on the day on which the tax became due. The specific characteristic of this time limit is that it is not governed by the general rules for calculating time under the Tax Procedure Code. The first day of the deadline for assessing tax is already the date of expiry of the deadline for filing the tax return, not the following day. Nor shall this period be extended if it expires on a public holiday, Saturday or Sunday.
In which cases can the deadline change?
The deadline for assessing tax can be modified in three different ways: it can be extended, suspended, or interrupted.
The time limit is extended by one year at a time if, e.g., an additional tax return has been filed or a notification of a decision on tax assessment or a notification of a decision on an appeal has been made in the last twelve months prior to the expiry of the current deadline. Suspension of a time limit means that the time limit does not run for a certain period, i.e., for the duration of court proceedings, criminal prosecution for a tax crime, or proceedings on an issue necessary for the correct tax assessment (e.g., probate proceedings). If the time limit is interrupted, it starts to run again from the beginning; in practice, interruption occurs in particular when a tax inspection is initiated, or a regular tax return is filed.
There are also exceptions in which the tax may be altered even after a three-year or ten-year period. These are cases where a tax crime has been committed or where the taxpayer has filed an additional tax return for a lower tax before the expiry of the deadline, but the deadline for assessing the tax expired before the end of the tax proceedings. In this case, the tax may be increased or decreased regardless of the deadline for assessing tax.
What about paying the tax?
It is necessary to distinguish the tax payment deadline from the tax assessment deadline. The deadline for tax payment is the time limit during which the tax authority is entitled to recover the assessed tax. Its basic length is six years, but it ends no later than 20 years after its beginning or 30 years if the tax has been secured through the right of pledge recorded in a public register (e.g., land register). The period begins to run on the date the tax is due and is not extended if its last day falls on a Saturday, Sunday or holiday. This deadline can be modified as a result of acts within enforcement or insolvency proceedings.
How to defend yourself?
If the tax authority increases your tax after the tax assessment deadline, such a decision is unlawful. In such a case, it is necessary to defend yourself and file an appeal against the order to pay tax in a timely manner, i.e., within 30 days of its receipt.