In connection with the extraordinary situation relating to the COVID-19 pandemic, the finance minister issued several decisions last year and this year, which brought general relief for taxpayers in the fulfilment of tax obligations, as well as a moderation of sanctions in case of failure to meet statutory obligations. The legal basis for the issuing of these decisions is the stipulation of article 260 of the Code of Tax Procedure, enabling the finance minister to partly or fully waive a tax or tax accessory in case of extraordinary events, especially natural disasters. This procedure has enabled flexible and efficient reaction to the changing extraordinary situation with the aim of helping the affected taxpayers as efficiently as possible.

One of the most important tools of these extraordinary measures is the general waiver of late payment interests under article 252 of the Code of Tax Procedure. Late payment interest is a sanction mechanism arising as a consequence of failure to fulfil a primary tax obligation of the taxpayer. Late payment interest incurs on the fourth day following the original date of maturity of the tax, until the date of its payment, and its amount corresponds to the amount of late payment interest according to the Civil Code.

Based on the above-mentioned decisions of the finance minister, for example the following types of late payment interests have been waived generally: 

• late payment interest for income tax for the taxable period of the year 2020 on the condition that payment is made on 3 May 2021 at the latest
• late payment interest for income tax for the taxable period of the year 2019 on the condition that payment is made on 18 August 2020 at the latest
• late payment interest for value added tax for the individual taxable periods of September 2020 to March 2021 for taxpayers, whose activity was banned or limited, if payment is made on 16 August 2021 at the latest
• late payment interest for road tax for the taxable period of the year 2020, if payment is made on 16 August 2021 at the latest

With regard to the extensiveness of this subject matter for a common taxpayer, we bring you a brief summary here with regard to our current experience with these extraordinary measures, as to how exactly this general waiver of late payment interest work in practice and what effects follow from it for taxpayers:

1. Entitlement to waiver of interests applies to every taxpayer, who has fulfilled the conditions stated in the respective decision. If you have paid tax within the deadline stated in the given decision, at the latest, and you have also met all other conditions, you are entitled to the waiver without any further conditions.
   
   
2. The waiver of interests will take place automatically without the necessity for any cooperation on the part of the taxpayer, unless the respective stipulation explicitly stipulates otherwise. If you have fulfilled all the specified conditions, you do not need to deliver any special request for waiver of late payment interests to the tax administrator.
   
   
3. Since, from the formal perspective, this is no shift of the deadline for payment but only a retroactive waiver of late payment interests (although from the factual perspective, the measure has the same effects), it applies that for the period from the end of the statutory period for payment of tax to the deadline specified in the respective decision late payment interests incur formally and they are continually prescribed to the personal tax account of the taxpayer. Until the payment of the tax, you may therefore see the prescribed interest in you tax information box, and moreover, during this period, the financial office cannot issue a confirmation of non-existence of tax underpayments for you.
   
   
4. After the fulfilment of all conditions specified in the respective decision, especially after payment of the tax within the deadline specified in it, the tax administrator will retroactively cancel prescription of late payment interest in the personal tax account of the taxpayer. As the situation may unfortunately occur in practice that the tax administrator may forget to perform this deletion, we recommend to you to always check in the tax information box, if deletion of prescription of late payment interest has actually taken place, and if not, to immediately contact the respective tax administrator with a request for remedy of the situation.
   
   
5. In case of failure to meet the conditions of the respective decision, especially on grounds of not having paid the tax within the deadline specified in it, the taxpayer is obliged to pay late payment interest for the period from the end of the statutory period for payment of tax to the date of its actual payment.
   
   
6. Even in case of failure to meet the conditions of the respective decision, the taxpayer is, nonetheless, authorised to request waiver of late payment interests from the the tax administrator, if the delay in payment of tax occurred on grounds that could be justified with regard to the circumstances of the given case. This request will be subject to individual assessment by the tax administrator, though, and the taxpayer therefore cannot be certain of its automatic positive processing.

In case of any questions or requests relating to general or individual waiver of late payment interest in relation to the COVID-19 pandemic, please, do not hesitate to turn to us.