On 16 March 2020, the Financial Administration decided to react to the emergency measures currently in operation in relation to the spreading of the SARS-CoV-2 virus. It is a so-called general pardon issued by the finance minister and a new directive of the General Financial Directorate GFŘ - D - 44.

I. Automatic waiver of tax accessories (sanctions) and the administrative fee

Finance minister JUDr. Alena Schillerová, Ph.D. has used the power entrusted to her by the code of tax procedures for the case of emergency incidents and has issued a decision about a waiver of tax accessories and the administrative fee. Based on this decision, the following are waived automatically (without request):

(1) File for late submission of the tax statement for the income tax for the taxable period of 2019 and the late payment interest and the interest on the postponed sum from this tax.

The waiver applies to taxpayers submitting an income tax declaration with the deadline of 1 April 2020 or submitting the income tax processing. The automatic waiver does not apply to the fine for late submission of the processing of the income tax from employment collected by means of retention in the form of prepayments according to article 38j paragraph 4 of the income tax act, or to the late payment interest or the interest on the postponed sum, which relate to underpayment of the income tax from employment paid by the payer. The condition for the waiver is the tax declaration or tax processing/payment take place by 1 July 2020 at the latest.

In case of the taxable period of the year 2019, the deadline for submitting the tax declaration is not postponed, there is only a waiver of sanctions in case this submission is made by 1 July 2020. A tax declaration submitted in this way will be viewed as submitted late, but without statutory sanctions, which is a significant fact for determining the amount of prepayment due as of 15 June 2020. According to the stipulation of article 38a of the income tax act, the sum, which the taxpayer calculated himself and state in the (additional) tax declaration for the period immediately preceding the taxable period, is also considered the last known tax obligation for determining the periodicity and amount of prepayments in the prepayment period, with validity from the day following the deadline for submitting (additional) tax declaration, and if the (additional) tax declaration was submitted late, with a validity from the day following the day of its submission. If the tax declaration for the taxable period of the year 2019 is submitted on a day preceding the due date of the prepayment, the amount of the prepayment due as of 15 June 2020 will be calculated according to this tax declaration already. In case of its submission after this date, it will not influence this prepayment retrospectively.

Regarding the obligation to submit the Survey of income and expenses of self-employed persons, the original deadlines remain in operation, that is within one month from the day, on which the self-employed person was supposed to submit the tax declaration (i.e. by 4 May 2020 at the latest). We will inform you about potential changes in this context.

(2) For value added tax payers the fine for failure to submit a control statement reaching CZK 1,000 incurred for the period of 1 March to 31 July 2020 (for late submission without summons from the tax administrator).

(3) For all taxpayers the administrative fee for accepting:

• a request for waiver of late payment interest or the interest on the postponed sum and the fine for failing to submit the control statement according to article 101k of the value added tax act, on the condition that the request is submitted from the date this decision takes effect until 31 July 2020;
• a request for permitting postponement of the payment of tax, or its division into instalments, or a change of this decision, on the condition that the request is submitted from the date this decision takes effect until 31 July 2020.

(4) Fine for late tax statement for taxpayers, who were, upon individual request, permitted at least partial waiver of late payment interest for this tax or based on an individual request they were permitted postponement of the payment of tax, or its division into instalments, and this waiver was due to reasons relating to the spreading of the SARS-CoV-2 virus.

II. Extension of the reasons for waiver of tax accessories on request

In addition to the above-mentioned decision of the finance minister, the Financial Administration has also changed the current waiver directives GFŘ-D-21 and GFŘ-D-29, adding another justifiable reason to them, i.e. the circumstance that the taxpayer proves credibly that the delay in tax payment/arising of the penalty for failing to submit a contract statement is the result of the operation of emergency measures. This is a new directive, GFŘ-D-44.

In case of proving the link to emergency measures, it is possible according to this directive to consider for example substantiation of the influence of a quarantine measure, illness, related care after a household member (relating to the taxpayer, his representative or persons crucial for the operation of the taxpayer).

In case of substantiating a justifiable reason for the delay relating to interests, it is also further possible to consider for example a list of cancelled tours/plane tickets/admission tickets/events, comparing the occupancy or revenues to the previous period, substantiating an outage of production due to obstacle relating to emergency measures on the side of the supplier etc.

In case of any questions regarding this issue, please, do not hesitate to contact us.

Miroslava Janďourková
Jaroslava Půtová