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Czech Republic: Tax relief in response to coronavirus (COVID-19)

Czech Republic: Tax relief in response to coronavirus

The government approved a package of tax relief measures to address the impact of the coronavirus (COVID-19) pandemic, and guidance on how taxpayers can apply these tax relief measures has been published by the tax administration.


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Among the tax relief measures are the following:

  • A general waiver of penalties and default interest in respect of income tax (for tax returns for the 2019 tax period with an original filing deadline of 1 April 2020). Corporations with taxable periods other than the calendar year may not make use of the general waiver and must apply for a waiver separately.
    Waiver of penalties for the late payment of tax, and penalties for the late filing of returns in respect of all taxes (to be determined on a case-by-case basis).
  • Waiver of default interest for the late payment of tax (including prepayments).
  • General waiver of penalties for the late filing of value added tax (VAT) ledger statements.
  • General waiver of administrative fees.

Other relief opportunities

In addition to the tax relief measures, there are also other procedural options that may enhance cash-flow, such as:

  • Application for the release from an obligation to pay corporate income tax prepayments: If a decline in income is expected, it is possible to apply for the cancellation of a duty to pay tax prepayments, covering also a prepayment payable on 16 March that has already been paid. 
  • Application for tax deferment (in form of a postponement of the tax due date or the division of tax into instalments): The tax administrator can allow the deferment of a specific tax liability amount (such as VAT or income tax). It is appropriate to file the application together with the tax liability calculation or the relevant tax return. The tax relief package then allows for the waiver of interest on the deferred sum.
  • Extension of the deadline for filing corporate income tax returns (including fiscal years): It is possible to apply for the extension of the statutory deadline for up to three months, or 10 months where income from abroad is also involved. If the tax administrator agrees to the extension, the due date for the payment of tax will also be postponed.

Read a March 2020 report prepared by the KPMG member firm in the Czech Republic

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