Top-up taxes: extension of deadlines for tax returns and information returns
The chamber of deputies has approved an amendment to the Act on Top-Up Taxes extending the deadlines for filing the first-time Czech top-up tax returns and information returns to 18 months after the end of the taxable period. The amendment containing several other changes is now heading to the senate.
We have previously written about the amendment here. In addition to extending the deadlines, it also introduces changes that should adapt the rules for the determination of the Czech top-up tax to the model rules. In addition to the wording proposed by the government, the chamber of deputies approved several amendments concerning mainly insurance companies.
Extension of deadlines
As we reported here, the Ministry of Finance published a draft of the content requirements for the information return (the information return contains information about the entire group and serves as a basis for preparing and checking the tax return) and the tax return. The forms will be common for the Czech and allocated top-up tax. The information return derives from the OECD’s GloBE Information Return. The tax return has two parts (Czech and allocated top-up tax) and taxpayers will fill in the part relevant to them.
The deadline for filing the information return will be 15 months after the end of the reporting period, 18 months for the first-time filing. The deadline for filing the information return for the 2024 calendar year will thus be 30 June 2026.
The deadline for filing the tax return for the allocated and Czech top-up tax will be 22 months after the end of the reporting period (i.e., for the 2024 calendar year, 31 October 2026).
Next steps in top-up taxes
On the legislative front, it will be important to finally approve the amendment to the law and the content of the return forms, to issue the forms and data structures of the information return and tax return, and to complete the implementation of DAC 9 allowing for the filing of a single information return within the EU.
From the taxpayers' point of view, the preparation of the country-by-country report (CbCR) will be important, as it will serve as a basis for a simplified procedure for the reporting of top-up taxes in the initial periods. If one of the safe harbour rules are met (e.g., the effective tax rate above a certain level), there will be no need for a jurisdiction and its constituent entities to perform a detailed calculation of top-up taxes. Therefore, the country-by-country report needs to meet the conditions required by the top-up tax regulations (a qualified country-by-country report). Within the EU, the deadline for filing the country-by-country report for the 2024 calendar year is the end of 2025. If the conditions required by the top-up tax regulations are not met (e.g., use of an unauthorised source for the preparation of the country-by-country report or an incorrect combination of authorised sources for different constituent entities), the safe harbour rules cannot be used. Therefore, the preparation of country-by-country reports must also be addressed from a top-up tax perspective.