The amendment of act no. 280/2009 Coll. of the Code of Tax Procedure, as subsequently amended (hereinafter the “Code of Tax Procedure”), about which we informed you in detail in the June issue of our newsletter, has been published in the Collection of Laws under number 283/2020 Coll. This extensive amendment will take effect on 1 January 2021.

Below we state a brief overview of significant changes in the Code of Tax Procedure:

• Support of digitalization of tax administration

The amendment is intended to support simplification and computerization of tax administration and to transfer communication with the tax administrator to the online environment. For this purpose, the functionalities of the existing tax information box are being extended significantly.

• Revision of the system of sanctions

The system of sanctions is being revised and interests are being lowered significantly, and unified with interests in civil law. Compared to the original draft, the tolerance period in case of late payment of tax remains preserved, during which no late payment interest arises, but this period is shortened from the current 4 working days to 3 calendar days.

• Prepayment of tax deduction

The amendment introduces the concept of an advance on excessive deduction, which enables returning an undisputable part of excessive deduction even prior to assessment. Newly, only the part of deduction, about which the tax administrator has doubts, will be retained. Entitlement to the prepayment will not arise, unless it reaches a minimum of CZK 50,000. 

• Changes in control procedures

The process of initiating and ending tax audit is being simplified. The physical presence of the taxpayer will newly not be required anymore. The control procedure will begin by delivering an announcement about the initiation of tax control, in which the object and scope of tax control will be specified. The deadline for determining tax will, nonetheless, only be interrupted by the actual beginning of control activity.

• Other significant changes
• Introduction of the option of waiver of the fine for late tax statement;
• For prolongation of the deadline for submitting the tax declaration it will not be necessary to use a power of attorney at the tax administrator before the unprolonged deadline has elapsed (transitional provision - applies only to the taxable periods, which did not end before the day preceding the day, on which the amendment took effect);
• The essentials of tax forms must be specified by means of a decree. Based on this amendment, the Finance Ministry is currently preparing a decree, or decrees, which will stipulate the details of the data required by law in the form version (more specifically in article 72 paragraph 3 of the Code of Tax Procedure) as well as the format of the electronic form of such submission.

Jaroslava Půtová