Tax loss carry-back (anti-crisis tax package) (No. 929)
The amendment of Income Tax Act introducing the possibility of tax loss carry-back is "in the final stages" of the legislative process. It will be possible to claim a tax loss not only in the immediately FOLLOWING tax periods, as was the case so far, but now also in the two tax periods PRECEDING the tax period for which the tax loss is assessed through supplementary tax returns. The application of such institute would reduce the tax liability already paid and a tax overpayment would arise.
Based on the amendment, it is possible to claim tax loss in a period beginning 2 years before the beginning of the period for which the tax loss is assessed, or in the 5 following tax periods. For example, if the tax loss of taxpayer with a tax period of a calendar year is assessed for 2020, the tax loss carry-back can be applied in supplementary tax returns for 2018 and 2019. However, the possibility of tax loss carry-back is limited to a maximum amount of CZK 30 million.
Furthermore, it is now possible to ESTIMATE the tax loss for the current period and apply it in the tax return for the immediately preceding tax period. This means that the estimated tax loss for 2020 can be used as an item deductible from the tax base in tax return for 2019. However, if the tax loss calculated in regular tax return is lower than estimated and applied, an obligation to pay interest on late payment determined from the difference between the actual and estimate amount of tax loss will arise.