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Tax liberation package extended to retail and provision of services in business premises

The Ministry of Finance adopted another tax liberation package, extending the waiver of road tax and income tax prepayments and VAT-related default interest to entrepreneurs operating in retail and the sale and provision of services that had to close their business premises from 22 October 2020.

The tax liberation package has the form of a decision of the Minister of Finance, published in Financial Bulletin 25/2020, and only pertains to taxpayers whose major part of income generated in the period from 1 June 2020 to 30 September 2020 derived from retail and the sale and provision of services in business premises, excepting activities that may still be provided after 22 October 2020 in compliance with the government’s emergency measures.

To claim the waiver, more than half of the taxpayer’s income must derive from the above activities that were banned or curtailed by the government’s emergency measures. Taxpayers to which the waiver applies must notify the appropriate tax authority about meeting the conditions for the waiver. According to the liberation package, it is sufficient to notify the tax authority by email; however, for a higher level of certainty, we recommend using data boxes. Taxpayers who fulfil these conditions and have notified the tax authority are entitled to claim a waiver of:

  • default interest relating to VAT for the September 2020, October 2020 and November 2020 taxable periods or VAT for the third quarter of 2020 taxable period, if the VAT to which default interest relates is paid no later than on 31 December 2020
  • road tax prepayments for the 2020 taxable period payable on 15 April 2020, 15 July 2020, 15 October 2020 and 15 December 2020
  •  income tax prepayments payable in the period from 15 October 2020 to 15 December 2020.

Waivers concerning road tax and income tax prepayments do not waive the tax itself. Waivers concerning VAT do not cover the late filing of a tax return: both VAT returns and VAT ledger statements still have to be filed within the statutory deadlines. The statement of grounds for the minister’s decision points out that to the extent not covered by the decision, taxpayers may still apply for tax deferment or payment in instalments for reasons associated with the spread of SARS-CoV-2. If granted, default interest and interest on the deferred amount arising between 12 March 2020 and 31 December 2020 are automatically waived (see Financial Bulletin 9/2020).

The general waiver of VAT on the gratuitous delivery of selected goods and services for which the duty to declare VAT arose in the period from 1 October 2020 to 31 December 2020 is not subject to any change, i.e. the conditions stipulated in the last tax liberation package remain in application.