The new amendment to the Administration and Collection of Taxes Act, which should introduce substantial changes in the position of taxpayers in their dealings with the Financial Authorities, is now being prepared by the Government.

The main areas covered by the amendment are expected to be as follows:

  • In order to protect taxpayers, an original tax deadline may be interrupted in certain cases, when taxpayer applies for its extension. The interruption should last at least until the authorities respond to the application.
  • The Financial Authority will in the future need to take into account all circumstances which were discovered during an audit. This means that the tax administrator will also need to take account of findings which are to the benefit of the taxpayer.
  • The possibilities to submit supplementary tax return for lower tax liability will also be extended.
  • The most significant change is proposal to limit tax penalties to a maximum period of 500 days. After this period, the penalty in the amount of 140% of the Czech National Bank discount rate can be imposed. This provision should be applied retroactively for tax underpayments on which the penalty has not been imposed yet.

The content of this article is intended to provide a general guide to the subject matter. It is therefore not a substitute for specialist advice.

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