Additional tax relief from the third liberation package

Additional tax relief from the third liberation package

Jana Střelická
Additional tax relief from the third liberation package

Following the Liberation package I and II from March this year, the government proceeded with further tax reliefs or extensions of existing measures to support tax subjects in connection with the spread of coronavirus. These measures are summarized in Liberation package III adopted by the government on 8 June 2020 with effect as of the publication in the Financial Bulletin 9/2020 of 10 June 2020.

Probably the most important measure is the automatic waiver of sanctions for late filing of personal or corporate income tax returns and payment of income tax for 2019, if the obligation is fulfilled by 18. 8. 2020 at the latest. This waiver applies to all subjects that were required to file the tax return for 2019 by 1 April 2020 or
1 July 2020 (audited companies or subjects whose tax return is filed by a tax advisor), with the exception of entities whose competent tax administrator is the Specialized Tax Office. These subjects falling under the STO may, if they meet the conditions for extending the deadline for filing a tax return, request the tax administrator to extend the deadline for filing a tax return in the standard way. We remind you that this is not a postponement of the deadline for filing a return and for payment of tax due, but only a waiver of sanctions for late filing/late payment, thus, tax overpayment will be refunded within standard deadline of 30 days of the deadline for filing the tax return (if submitted by 1 July 2020). We also point out that the sanctions are waived only in the situation that the obligations to file the tax return and pay the tax due are met by 18 August 2020. In case of delay, the sanctions would apply from
1 July 2020.

In this context, we would like to point out that if the tax subject decides to pay the tax due for 2019 within this "extended" period, we recommend to also file a tax return within the "extended" period. Upon the filing the tax return, a tax liability is assessed as of the standard deadline (1 July 2020) which in the event of non-payment becomes a debt (which is not subject to sanctions if paid by 18 August), so in the period between tax assessment and the date of payment it would not be possible to issue a certificate of indebtedness to the tax subject.

Similarly to income tax, the fine for non-notification of exempt income is also waived if this obligation is fulfilled by 18 August 2020.

Liberation package III further extends the VAT waiver for free supply of protective equipment (especially facecloths, respirators, disinfectants, etc.) supplied in the period from 18 May to 31 July 2020.

There will also be an automatic waiver of interest on all taxes for the period from the start of emergency period, i.e. from 12 March 2020 to 31 December 2020 in cases where the tax administrator will individually approve deferment of tax payment or payment in instalments for reasons related to coronavirus. Administrative fees for submitting applications to the tax or customs office (application for deferment of tax payment or payment in instalments, application for waiver of interest on arrears, application for waiver of fine for failure to submit a control statement, etc.) made before the end of 2020 are also waived.

Until 31 December 2020 it is also possible to postpone the filing of the tax return for acquisition of real estate, including the payment of tax, which will bridge the period until the abolition of tax on acquisition of real estate takes effect.


Jana Střelická
Certified Tax Advisor