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News 2/2020

TAX MEASURES RELATED TO COVID-19

Dear readers,

We would like to inform you about the government measures to mitigate the negative impacts of Covid-19 pandemic in the field of taxation.

Income Tax

The deadline for filing income tax returns applicable to all natural and legal persons has been extended by 1 July 2020 with no requirement to prove reasons related to Covid-19.

Technically, this extension will be implemented by way of a general remission of penalties for late filing of the tax return and late payment of tax. The condition is that the tax is paid by 1 July 2020.

Submissions made in time before 1 July 2020 shall be treated as if there were no postponement. This is important for the purpose of setting the advance payments or of the period for refunding overpaid tax.

The above measure should be followed by an extension of the deadline for submissions relating to social and health insurance. Details on this issue are not yet known.

VAT

No general extension of the deadline for filing VAT statements and postponement of the payment of VAT are foreseen.

Only a remission of penalties for late submissions of control statements amounting to CZK 1,000 that have incurred or will incur between 1 March and 31 July 2020 have been approved. One late submission a year was previously permitted, now, the Financial Administration shall remit two penalties, however, in the basic amount of CZK 1,000 only.

Nevertheless, taxable persons may submit individual requests for remission of further penalties for failure to submit control statements amounting to CZK 10 to 50 thousand for the period between 1 March and 31 July. A clear connection with Covid-19 must be specified in the request.

Individual remission of penalties

Also, further penalties (default interest and penalties for late filing of other tax statements) shall be remitted upon individual requests.

Cash flow problems

In the event of a shortage of funds to pay taxes, a deferral or reschedule of tax payments may be applied for. Equally, it is possible to apply for reduction of advance payments of income tax due in March and the following months. Applications will be assessed taking into account the current situation.

General remission of the administrative charge

The remission shall apply to the administrative charge for submitting an application for deferral or reschedule of tax payments, an application for remission of default interest or interest on the deferred amount as well as applications for remission of penalties for failure to submit control statements.

Tax authorities’ requests

In requests, tax authorities should set deadlines of at least 15 days. So far, deadlines of only eight days were a common practice.

We will be glad to assist you in preparing the respective requests and other submissions. 

If you have any further questions or require further clarification, please feel free to contact us anytime.

Your WTS Alfery Team