The Planned Tax Code Amendment Is Not Only Positive for the Taxpayer

On 26 August 2019, the Government approved an amendment to the Tax Code prepared by the Ministry of Finance.

Part of the amendment is the legislative anchorage of the online tax office, thanks to which taxpayers will be able to solve more of their obligations online. For example, it should be possible to use an e-citizen login, data box login or login assigned by the tax authority to log into the tax portal and authorize submissions. The Ministry of Finance expects to launch the first version of the portal in the fourth quarter of 2020.

The amendment should also introduce an extension of one month’s period for filing tax returns due for a period of at least 12 months (e.g. income tax), from three to four months after the end of the calendar year if the tax return is submitted electronically.

Following the Constitutional Court’s judgment, partial refund of excess VAT in the form of advance payments should be possible in certain situations. On the other hand, the tax administration will now have 45 days to refund the excessive VAT. It currently has only one month.

In addition, the time limit for the imposition of the late filing of the tax return should be adjusted. It must now be paid if the delay is longer than five business days. This exemption should now only apply to taxes levied for less than one year. For example, for income tax, the penalty for late tax return filing should be calculated from the first day past the deadline.

Similar changes should also occur for interest on late payment, which should be newly calculated from the day following the original due date of the tax until the date of its settlement. At the moment, interest on late payment runs from the fifth business day following the original due date.

On the other hand, the amount of interest on late payment should now be the same as default interest under the Civil Code, based on which the amount of late payment interest corresponds annually to the repo rate set by the CNB for the first day of the calendar half-year in which the late payment occurred increased by 8 percentage points. The Tax Code now provides for an increase of 14 percentage points.

The expected date of entry into force is 1 May or 1 June 2020 depending on the course of the legislative process. I will keep you informed about further developments.