Liberation Tax Package
In terms of VAT, the following measures apply:
• A general waiver of the CZK 1,000 penalty for failure to submit a control statement, only if the liability to settle such a penalty arises in the period from 1 March 2020 to 31 July 2020;
• If the VAT payer is able to prove the failure is in any way related to the COVID-19 outbreak (typically an illness or quarantine of accountants or other key employees whose absence made it impossible to fulfil VAT obligations; a substantial drop in revenues due to the outbreak), the following measures apply:
- A waiver of the late payment interest;
- A waiver of the interest connected to the deferral of VAT payment or VAT payment instalment schedule;
- An automatic waiver of the sanction for the late submission of the VAT return if the tax office grants one of the two above waivers as well;
- A waiver of other sanctions for the late submission of the control statement (all sanctions from CZK 10,000 to CZK 50,000). This applies to cases when the appeal is issued within the period of 1 March 2020 to 31 July 2020;
- A general waiver of administrative fees for the filing of the respective requests.
All sanctions can be waived only after the related VAT liability is paid and the respective control statement(s) are submitted.
The Ministry of Finance has not extended the deadline for the submission of VAT reports or payment of VAT liability as such.
Corporate and Personal Income Tax
With regard to CIT and PIT, the following measures apply without the necessity to provide any evidence about a connection to the outbreak for taxpayers (i) not subject to a statutory audit and/or (ii) not engaging a tax advisor for income tax return preparation and filing:
• A general waiver of the penalty for failure to submit tax return from 1 April 2020 to 1 July 2020
• A general waiver of late payment interest from 1 April 2020 to 1 July 2020
It is also expected that a similar approach will also be taken in the field of health and social insurance where reports are usually filed by individuals until the end of 1 April 2020. However, no official communication was made available as of today.
Taxpayers (i) subject to a statutory audit and/or (ii) engaging a tax advisor for income tax return preparation and filing follow the extended filing deadline of 1 July 2020.
Author: PwC Czech Republic