Postponement of advance payments on income tax on dependent activities and of withholding tax

The General Financial Directorate (GFD) has published a guideline allowing payers of personal income tax on dependent activities to apply for postponement of advance payments or for payment of the tax in instalments. Postponement (or payment in instalments, as the case may be) is also possible for certain types of withholding tax – e.g. on income of taxpayers who are not Czech tax residents from the provision of services, commercial, technical and other consultancy activities, etc., in the territory of the Czech Republic.

This measure aims to support employers and taxpayers who have insufficient funds for the payment of wages and levies on wages or possibly to meet other liabilities related to income subject to withholding tax, all that due to the extraordinary measures. The original guideline issued in 2015 did not allow to postpone advance payments on personal income tax on dependent activities or withholding tax.

Taxpayers can thus newly apply for postponement of advance payments on personal income tax with regard to dependent activities for the period from February to July 2020, and for withholding tax which falls due between 31 March and 31 August 2020. However, the postponement is only possible until 30 September 2020.

A postponement or payment in instalments may only be permitted on the basis of an individual application filed by the taxpayer. The application must contain information on the relevant advance payment or withholding tax, its amount, the grounds for the application, and the date until which the postponement is requested or the suggested payment schedule, as the case may be. The applicant must also prove grounds for postponement relating to the extraordinary measures, e.g. document the impact of an ordered quarantine or disease on business; demonstrate a production outage caused by obstacles related to the extraordinary measures on the part of the suppliers; prohibition of retail sale and provision of services due to the extraordinary measures, etc. The impact of extraordinary measures can be documented, for example, by comparing current sales with sales in the previous period. Default interest will accrue on the outstanding amount of the advance on tax (withholding tax) during the period of postponement; nonetheless, the tax administrator may waive the default interest based on an individual application pursuant to the GFD Guidelines D–44 (“COVID grounds”)

The guideline also states that an application need not be rejected if the taxpayer has some funds in his account but he needs them to pay fixed costs. Each application has to be assessed individually. Applications submitted by 31 July 2020 will not be subject to an administrative fee.

Please note that applications for postponing advance payments on dependent activities or withholding tax must be filed anew every month.

Sdílet článek