We would like to briefly inform you that the government approved the so-called Tax Relief Package at the weekend – a package of measures that should help taxpayers, and the economy, deal with the coronavirus (Covid-19) emergency. The exact parameters of the package will be released this week; however, according to the Ministry of Finance in a press release, the basic measures that should come into effect are as follows:
- General waiver of fines for late submission of personal and corporate income tax returns and a cancellation of default interest on late payment of taxes for the 2019 tax period, provided the taxpayer has filed a tax return and paid outstanding taxes no later than 1 July 2020. This means that all taxpayers automatically have a three-month delay for filing their income tax returns and paying their outstanding taxes penalty-free, without having to prove hardship related to coronavirus.
- Waiver of penalties related to late tax return filings in all other cases, provided that the taxpayer individually requests to be exempted from default interest, for a deferral or for a repayment plan and is able to demonstrate reasons related in any way to coronavirus. Typically, this could be due to illness or a quarantine of the taxpayer’s accountants or other key employees whose absence rendered it impossible to fulfil tax obligations.
- General waiver of up to CZK 1,000 in fines incurred between 1 March and 31 July 2020 related to the late submission of VAT control reports.
- Individual waiver of fines for failure to submit a VAT control report from 1 March to 31 July 2020, upon request, for reasons related to coronavirus.
- General waiver of administrative fees for filing an application for deferral or rescheduling of tax, for submitting an application for cancellation (remission) of default interest, as well as for the amount deferred, and for applying for cancellation (remission) of a fine for failure to submit a VAT control report. All applications should be submitted by 31 July 2020.
- Although it is not legally possible to postpone the launch of the third and fourth waves of electronic sales records (EET), which begin going into effect from 1 May 2020, the Financial Office and Customs Administration will proceed with maximum tolerance in its checks on this from 1 May for three months, i.e. until 31 July 2020, and will provide exclusively for advisory. In fact, businesses affected by the coronavirus will not be sanctioned during this period if they were not able to prepare in time for the electronic sales records.
- The Tax Relief Package does not address automatic waivers of fines in connection with late payments of income tax advances; hence, they will remain due within the standard deadlines of the current advance period. Taxpayers affected by the coronavirus should be able to follow the second point above, i.e. eventually, they should be able to apply for a waiver of the obligation to pay tax advances or for a reduction of their tax advances.