The Ministry of Finance of the Czech Republic has reacted to the current emergency situation linked to the new type of coronavirus, issuing a precaution (the so-called 'liberation package'), with which it wants to reduce the effects arising from taxpayers not having fulfilled their tax obligation on time. In this article we will focus on obligations regarding the value added tax and we will recapitulate the options of relief for taxpayers. We will also briefly deal with the electronic record of sales (EET).

Value added tax

Standard obligations

The taxpayer is obliged to submit the tax declaration, recapitulative statement and control statement within 25 days after the end of the taxable period. If such a day falls on a weekend or public holiday, the deadline ends on the nearest workday. The tax liability is due with the same deadline.

If the taxpayer is more than 5 workdays late with submitting the tax declaration or recapitulative statement, the tax administrator will assess a fine for delayed tax statement.

For delay of more than 4 workdays in the payment of the tax liability, the tax administrator will assess a late payment interest.

For late submission of the control statement or failure to submit it, the tax administrator may impose a fine reaching from CZK 1,000 to CZK 50,000, depending on the specific circumstances of the case. Here the delay arises on the first day after the end of the deadline and no tolerance period is applied, not even the 5-day one.

Relief relating to the coronavirus pandemic

The liberal package of the government, which was published in the Financial Newsletter this week, has expanded the situations, in which it is possible to request waiver of tax accessories, adding the current emergency situation caused by the coronavirus from the tax administrator.

The taxpayer may request waiver of the late payment interest and the interest on the postponed sum, if he proves a link to the emergency situation (e.g. hospitalization, quarantine measures, incapacity of the person processing accounting to work.). If the request is granted (even if only partially), the tax administrator will also automatically waive the fine for late tax statement, based on which this tax liability was assessed (if submitted after the deadline).

The tax administrator will further waive the fine for late submission of the control statement reaching CZK 1,000 (i.e. late submission of the control statement after the deadline, but also without previous summons from the tax administrator), if the liability to pay it arises in the period from 1 March to 31 July 2020. The taxpayer will not have to substantiate the link to the coronavirus. It is possible to request waiver of other fines relating to the control statement (fines reaching from CZK 10,000 to CZK 50,000) only if the taxpayer proves a link to this emergency situation.

At the same time, administrative fees for submitting a request for waiver of late payment interest and for interests from the postponed sum are being waived.

Electronic records of sales (EET)

The expected onset of record of sales for all activities (from 1 May 2020) can no longer be reversed or postponed. The tax administrator has announced, though, that in the first 3 months, the administrator will proceed with tolerance during control activities and will rather perform a consulting function. According to the information published on the website of the ministry of finance, this procedure will only apply to taxpayers, to whom the onset of record of sales from 1 May 2020 applied and have been affected by the coronavirus.

We will continue to monitor the situation. In case of any questions on this topic, we will be happy to be at your service.

Michal Scholtz
Milan Kolář