Increase in tax-related interest

If a tax liability is not paid on time, late-payment interest arises on the fourth calendar day following the tax due date. Although the first three calendar days after the due date are not subject to late-payment interest, a taxpayer who settles the tax during this grace period cannot be regarded as fully compliant with their tax obligations. This may have implications in the future, for example when assessing applications for deadline extensions. For tax purposes, the payment date is the date on which the payment is credited to the tax authority’s bank account. If the total amount of late-payment interest does not exceed CZK 1,000, it is not assessed by the tax authority.

Late-payment interest is calculated on the outstanding tax amount using an interest rate equal to the CNB repo rate valid on the first day of the calendar half-year (i.e., 1 January or 1 July), increased by a fixed margin of 8 percentage points. It should be noted that the late-payment interest rate for tax purposes may change during the period of default, depending on the applicable calendar half-year.

Accordingly, two late-payment interest rates apply in 2026:

• 11.50% until 30 June 2026, and
• 11.75% from 1 July 2026.

On the other hand, there is good news for taxpayers where the tax administrator has failed to refund an overpayment on time or has incorrectly assessed the tax. In such cases, interest is calculated at the same rate as late-payment interest, i.e. currently 11.75% p.a.