Watch out for the deadline for filing additional tax returns

In its recent decision, the Supreme Administrative Court (SAC) confirmed that the deadline for filing additional tax returns for a lower tax liability is based on a subjective lapse period – in other words, after that period expires, it is no longer possible to file additional tax returns.

The dispute involved the following situation: in tax proceedings initiated by a tax administrator, a taxpayer failed to support with relevant documentation that certain taxable supplies were effected in January 2013. Therefore a corrective tax document was issued by the taxpayer, with the taxable supply’s date of 31 May 2013. In response to the outcome of the tax inspection of the above taxable period and to the issue of a corrective tax document, an additional tax return was filed by the taxpayer on 28 April 2016, for a lower output VAT.

Under the VAT Act, it is not possible to correct the tax base or the amount of tax after three years from the end of the taxable period in which the duty to declare tax on the original transaction arose (the objective period). At the same time, the Tax Procedure Code stipulates that if the tax is determined in an incorrect amount, an additional tax return for a lower tax liability may be filed until the end of the month following the month in which the relevant facts were ascertained by the taxpayer (the subjective period).

The moment of ascertaining the relevant facts is thus crucial to determine the beginning of that period. The SAC stated that the taxpayer must have been aware of the inconsistencies in the transactions, which was also confirmed by them having issued the corrective tax document in May 2013. The SAC therefore concluded that the facts relevant for filing an additional tax return were ascertained on 31 May 2013 at the latest, and the taxpayer should have filed an additional tax return by the end of the following month – according to the court, the subjective period thus had expired on 30 June 2013. On these grounds, the SAC concluded that in April 2016 the taxpayer was no longer entitled to file an additional tax return for a lower tax liability, as the deadline had expired.

To conclude: the date of ascertaining relevant facts given in the tax return form cannot be regarded as a mere formality and must be given proper attention. Taxpayers should be prepared to support the indicated date to tax authorities if any doubt arises.


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