The Supreme Administrative Court dealt with a dispute between a plaintiff and a defendant (the Appellate Financial Directorate) concerning an appeal in cassation relating to a wrongly applied tax credit for spouse (case no. 10 Afs 186/2020-40).

The plaintiff submitted an affidavit from his wife in support of the tax return, in which the tax credit was incorrectly claimed, stating: “I declare that I had no income from employment throughout the year 2013. I received maternity benefits (maternity assistance + parental allowance) throughout the year.” It is evident from this that the plaintiff did not include the maternity benefits paid for the year 2013 in the amount of CZK 122,289 in his wife’s income, which is not in accordance with the conditions for claiming the tax credit for spouse under article 35ba letter b) of the Income Tax Act. 

The plaintiff argues against the judgment on the ground that he did not know that maternity benefits are included in the income for tax purposes. He supposes that the tax administrator should have brought this fact to his attention and invited him to submit supplementary tax return.

The tax administrator proceeded in the following way in the complainant’s case. The complainant submitted his tax return in March 2014. According to the tax file, the tax administrator notified the complainant twice by telephone in the course of February 2017 that he had improperly claimed tax credit for spouse for the taxable period of 2013 and advised him to submit a supplementary tax return. The complainant failed to do so and the tax administrator therefore invited him in writing pursuant to article 145 paragraph 2 of the Code of Tax Procedure to submit supplementary tax return within fifteen days. The complainant did not submit supplementary tax return within the deadline. Therefore, the tax administrator assessed the complainant with tax (negative tax bonus) in the amount of CZK 23,100 by means of an additional payment assessment, which also made the complainant legally obliged to pay a penalty of CZK 4,620 on the assessed tax [article 251 paragraph 1 letter a) of the Code of Tax Procedure]. 

The SAC concludes that the tax administrator acted in accordance with the law and the case law and was sufficiently accommodating towards the complainant.  Both the defendant and the Regional Court assessed the case correctly. 

Author: Valérie Kovářová, Roman Burnus