In May of this year, we informed in our newsletter that the planned amendment to the Tax Code had surprisingly not yet been approved. The government then submitted an amended bill to the Chamber of Deputies, which went through the legislative process without major complications, and on 26 June 2020 the amendment to the Tax Code was published in the Collection of Laws under No. 283/2020 Coll., effective 1 January 2021.
In addition to changes related to the digitalisation of tax administration, the amendment also brings interesting modifications in the area of deadlines for filing income tax returns for individuals and legal entities. According to the explanatory report on the amendment, the changes should motivate taxpayers to abandon the filing of tax returns in paper form and start filing electronic returns.
The general three-month deadline for filing a tax return for taxes assessed for a tax period of at least 12 months remains the same, i.e. the deadline for filing personal and corporate income tax still applies three months after the end of the tax period. This three-month period is extended by one month for taxpayers who file tax returns electronically and are not required to have their financial statements audited in accordance with the Accounting Act. For taxpayers whose financial statements must be audited, the deadline for filing a tax return is still six months after the end of the tax period.
In general, it can be stated that the aforementioned extension of the deadline by one month applies both to individuals filing their tax returns electronically and to all legal entities, as they are required to file tax returns electronically.
Another fundamental change in the area of deadlines for filing tax returns from the income of individuals and legal entities is for taxpayers who authorise a tax advisor or lawyer (hereinafter “advisor”) to file their tax return. In this case, the six-month deadline for filing a tax return by the advisor is maintained, but it will no longer be necessary to apply for a power of attorney with the tax administrator within three months after the end of the tax period, as had previously been the case. It will be possible to apply for a power of attorney with the tax administrator only together with the filing of the tax return.
The attentive reader did not miss the fact that the tax administrator may be in temporary uncertainty regarding the length of the period for filing a tax return, and thus the deadline for the payment of the tax, or the moment from which the period for the refund of the repayable overpayment is based. In practice, the tax administrator will be able to determine whether the deadline has been extended only after the tax return has been filed and the extension will thus take place ex post, with retroactive effect. Any request to file a tax return may be issued by the tax administrator only six months after the end of the tax period.
Last but not least, it must be added that the general three-month period may be maintained even if a personal and corporate income tax return is filed electronically or by an advisor. In other words, if the tax return is filed for a tax period, e.g., a calendar year, and is filed by the end of three months after the end of the tax period, i.e., April 1, the tax return will be assessed on April 1, regardless of the method of filing. This situation can have a positive impact on the taxpayer if the tax return results in a tax overpayment, and thus the 30-day period for returning the refundable overpayment starts on April 1.
In conclusion, we remind you that the effective date of the amendment to the Tax Code is 1 January 2021. According to the transitional provision, the new system of deadlines for filing tax returns will apply to the tax period ending no earlier than 31 December 2020. For taxpayers who have a tax period of a calendar year, these changes will apply at the earliest to the filing of tax returns for 2020.
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