Changes regarding inspection reports
Reasons for waiving penalties related to inspection reports extended
Under direction D-29, the Financial Administration has extended the possibility to waive a penalty related to not submitting an inspection report. There are additional defined justifiable reasons that can be used as a basis for applying to waive a penalty.
It is now possible to apply for completely waiving up to two penalties charged for errors that occurred in 2016 and one penalty for an error that occurred in 2017 without giving any specific reason. There is a condition that the tax payers have not seriously violated the tax or accounting regulations in the preceding three years.
It is currently also possible to apply for waiving a penalty when the payer has answered an appeal to submit an inspection report or to correct a discrepancy but the payer did so too late, though within five days at the latest of the official deadline, and at the same time, in a situation where the payer was not obliged to submit an inspection report or when the payer confirms the correctness of the originally submitted report.
Before sending an application for waiving a penalty, we recommend carefully reading the above-mentioned direction which describes the issue in detail. The application for waiving a penalty is subject to an administration fee of CZK 1,000.
The date of delivery of an appeal sent by e-mail
Based on a finding of the Supreme Court, Section 101(g)(5) of the VAT Act was revoked effective from 15 February 2017. According to this provision, the Financial Authority could consider an appeal for submitting an inspection report as delivered at the moment the tax administrator sends it via e-mail. The reason is that a public data network cannot be considered fully reliable and there may be situations where the payer can be assigned an obligation which he/she does not know about. The deadline of five working days for answering a tax administrator's appeal should be, in such cases, calculated from the moment the given e-mail is demonstrably delivered.
If a penalty has been assessed in cases where the appeal was delivered via e-mail only from 1 January 2016 to 15 February 2017, there is a possibility to apply for completely waiving the penalty in accordance with direction D-29.
