skupina

Income Tax

Monday 16 March 2020 Ministry of Finance published so-called Liberation Package in connection with the COVID-19 pandemic and relating measures taken by Czech government.

Based on so-called liberation package, the „blanket“ waiver has been granted for late submission and late payment relating to income tax provided that the delay does not last longer than 1 July 2020.  The taxpayers are not required to request for such waiver since it has been granted automatically. This covers both individuals (sole traders or others who are obliged to submit 2019 personal income tax return) and legal persons (e.g. companies without statutory audit, non-profit organizations). Additionally, the “blanket” waiver can be applied also for legal persons whose tax period is financial year, are not requested to have statutory audit and their deadline for submission is 4 May 2020, or 1 June 2020 provided they will submit the tax return by 1 July 2020.

If the taxpayers whose deadline for submission of their tax return is 1 July 2020 due to obligatory statutory audit or preparation and submission of tax return by certified tax advisor submit the tax return late or pay the due tax late, they will have to request the waiver individually.

Further, since 16 March 2020 the individual requests for reduction or cancellation of tax advances, postponement of tax payment or tax instalment assessment is possible.

Tax advances of income tax

According to Section 174 of Tax Code, the tax administrator may, in justified cases, stipulate advanced payments of the income tax differently (i.e. in a different amount) or permit exemption from the obligation to pay tax advances entirely for the duration of the whole taxation period.

It is possible to request for a different assessment of the advance payment, i.e. for its reduction or total cancellation, even retrospectively for the previously due advanced payments (e.g. as of 16 March 2020).

The request should state and justify the reasons if possible. Particularly those related to the spread of COVID-19. The tax authorities usually require the financial statements of current situation of taxpayer at the end of the month preceding such application.

If the tax administrator complies with the request, the advanced payment which has already been paid becomes an overpayment and will be returned at the request of the taxpayer.

In compliance with so-called Liberation Package all above mentioned applications are free of administrative charges till 31 July 2020.

The Liberation package II published by Ministry of Finance on 24 March 2020 released all taxpayers of income tax from the advance payment for income tax due 15 June 2020. This is applicable for both individuals and legal person.

If you have any additional questions or need to be assisted with the preparation of the applications, please do not hesitate to contact your KODAP advisor or directly to:

Eliška Krčálová, Tax advisor, hone +420 734 396 805, e-mail: krcalova@kodap.cz

Jan Kašpar, Tax advisor, phone +420 734 792 828, e-mail: kaspar@kodap.cz

Jan Mašek, Tax advisor, phone +420 734 424 380, e-mail: masek@kodap.cz


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