Waiver of sanctions for late filing of 2020 income tax returns
With respect to the persisting effects of the SARS-COV-2 pandemic, the Ministry of Finance has issued another liberation measure that under certain conditions waives the penalties charged to taxpayers for the late filing of income tax returns for the 2020 taxable period and related default interest and interest on the deferred tax amount. The liberation measure comes in the form of a decision of the Minister of Finance and was published in Financial Bulletin No. 16/2021.
The decision waives sanctions for the late submission of corporate and personal income tax returns for the 2020 taxable period if returns are filed no later than 3 May 2021, or 1 June 2021 in the case of electronic filings. Tax underpayments should also be settled to the tax authority’s account before this date. If tax underpayments are settled or returns submitted later, penalties will be assessed retrospectively from the statutory deadline for filing tax returns (i.e. 1 April 2021, or 3 May 2021 for electronic filings).
The decision does not apply to taxpayers who file their income tax returns within the extended deadline of 1 July 2021, i.e. those who are required by law to have their financial statements examined by auditors or submit their income returns after 1 April 2021 through a tax advisor. Moreover, the decision does not apply to taxpayers who file their returns for taxable periods other than the 2020 calendar year.
The decision also waives sanctions for the late filing of supplementary income tax returns for 2019 for the payers of personal income tax who in 2020 changed the method of deducting expenses (i.e. instead of actual expenses, they deduct a percentage of income or vice versa). Penalties for the late filing of supplementary income returns for 2019 and default interest relating to the part of tax additionally assessed as a result of the change in the method of expense deduction shall be waived for taxpayers who file their supplementary income tax returns and pay tax no later than 3 May 2021, or 1 June 2021 for electronic filings.
In addition, the decision waives penalties for the late reporting of exempt income under Section 38w of the Income Tax Act if taxpayers who are natural persons report this information no later than 3 May 2021, or 1 June 2021. However, this only concerns taxpayers who file income tax returns for the 2020 taxable period. The waiver does not apply to individuals who do not have to file an income tax return but must report exempt income for the 2020 taxable period.
An amendment to the Act on Public Health Insurance postpones the deadline for filing statements of health insurance payments to health insurance companies by self-employed persons and the deadline for settling premium underpayments determined based on the 2020 statements until 2 August 2021. According to information from the Czech Social Security Administration’s website, statements of social security payments for 2020 can be filed without any sanctions by 30 June 2021. Any social security underpayments for 2020 must also be settled by this date to be able to claim a waiver of penalties for late payment.