Major Changes in tax rules (23.3.2020)


Liberation package I

1)     Flat waiver of late payment of personal and corporate income tax return and default interest until 1 July 2020 at the latest.  In fact, all taxpayers (individuals and entrepreneurs) will automatically be allowed to file their income tax and pay this tax without any sanction no later than 3 months later, without having to prove the reasons related to coronavirus. The main objective is to prevent the tax authorities, respectively. in post offices the concentration of natural persons who are not obliged to submit tax returns electronically.

2)     Exemption of the late payment penalty in all cases where the tax entity is individually excused late or delayed interest, repayment of the tax or a fine for failure to submit a VAT ledger. Typically, this may be an illness or quarantine of accountants or other key employees whose absence made it impossible to fulfill tax liability.

3)     General waiver of fines for the late submission of a VAT ledgers of CZK 1,000 incurred between 1 March and 31 July 2020.

4)     The General Financial Directorate will be instructed to individually waive fines for failure to submit a VAT ledger for the period from 1 March to 31 July.

5)     General waiver of the administrative fee for filing an application for the delay or repayment of the tax; and the application for remission of a fine for failure to submit a VAT ledger, for applications submitted by 31 July.


Liberation Package II

1)     Exemption of the June advance on personal and corporate income tax. The June advance (ie the second advance for quarterly payers and the first advance for half-yearly payers) will not be paid at all.

2)     General waiver of a fine for late filing of a real estate property tax return or for a late payment of a real estate property tax or an advance on this tax. The waiver applies to all late tax returns with a filing deadline from March 31 to July 31, 2020. The real estate transfer tax return can be filed no later than August 31, 2020. whereas in such cases interest for late payment or interest on the retention of property tax will also be remitted. In fact, all taxpayers will automatically be allowed to file a tax return on the acquisition of houses, flats, land, garages and the like and pay this tax only five months later.

3)     Introduction of the Loss carryback institute; the loss from 2020 year will be applicable in the tax return for 2019 and 2018 retroactively.

4)     Suspension of the obligation to electronically record sales for entities in all phases of the EET for an emergency period and for the next three months.

5)     The government decided on a six-month holiday in paying minimum health and social insurance premiums. The aim of the measure is to stabilize especially the most vulnerable, ie low-income self-employed. At the same time, however, it also relieves those who pay more than the statutory minimum. Self-employed sole traders and entrepreneurs will not have to pay monthly premiums for premiums between March and August 2020. Subsequently, in the 2020 bill, their levy will be reduced by these six months, the amount of the minimum premiums.

In particular, this means that self-employed persons will save CZK 29,916, ie six times the minimum premium (CZK 4986) for these 6 months. This measure will not only improve cash flow during an emergency, but will also eliminate the administration of premium payments.