Czech Republic: Deadline for filing additional tax return for lower tax (Supreme Administrative Court decision)
A Supreme Administrative Court decision concerning the deadline for filing additional tax return for lower tax
Deadline for filing additional tax return for lower tax
The extended chamber of the Supreme Administrative Court held (No. 2 Afs 363/2019) that the taxpayer was allowed to file an additional tax return for lower tax at any time during the deadline for assessing tax, which was contrary to existing case law.
Summary
The taxpayer paid value added tax (VAT) on receivables from a customer that did not in fact arise, thus eliminating the VAT liability. The taxpayer filed an additional tax return, requesting a refund of the incorrectly paid VAT.
The tax authority refused the refund on the grounds that the taxpayer had filed the additional tax return late by not sending it by the end of the month following the month in which they learned of the incorrect payment (i.e., within the subjective deadline). The tax authority’s conclusion was supported by the Supreme Administrative Court’s case law at the time. The denial of the refund was subsequently confirmed by both the Appellate Financial Directorate and the Municipal Court in Prague.
After a comprehensive assessment of the case, the extended chamber of the Supreme Administrative Court held that the subjective deadline did not apply to the filing of an additional tax return for lower tax (whether VAT or income tax), and the taxpayer was allowed to file such a return at any time during the deadline for assessing tax.
KPMG observation
The obligation to file an additional tax return for higher tax within the set deadline does not change, and taxpayers are subject to sanctions for missing it. Other deadlines, such as the three-year deadline for exercising the right to deduct VAT, also remain unchanged.
Read an October 2023 report prepared by the KPMG member firm in the Czech Republic
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