What is forgiven for taxes?
From July, self-employed persons and other persons can take advantage of the Summer of Grace for taxes and social insurance. The first part of the measure refers to the extraordinary remission of tax accessories, while the remission applies not only to debts recovered by tax enforcement, but to all debts under the jurisdiction of the Ministry of Finance. However, the special remission does not apply in the case of customs duty and its accessories.
Only natural persons can use the extraordinary remission of accessory tax. It doesn’t matter if you are an entrepreneur or not. The basic condition of the extraordinary forgiveness is the payment of the principal, to which the selected accessories are attached. This accessory will then disappear as a result of the forgiveness, if it has not yet been paid for (so there will be no return of already paid accessories).
The remission applies to a large part of the accessories of the tax, viz
- default interest or its equivalent under another law,
- interest on the chopped amount,
- fines for late tax claims,
- costs of proceedings, including execution costs.
Which principals are forgiven?
However, the grace summer does not apply to all debts, but only to those where the principal arose before September 30, 2022. The repayment of the principal must then take place no later than the end of the so-called grace period from July 1, 2023 to November 30, 2023. However, as pointed out by the Union of Taxpayers of the Czech Republic, the financial administration will register arrears for accessories only when they become final. Therefore, arrears arising from payment assessments issued before September 30, 2022 do not fall into the Summer of Grace, if the appeal proceedings regarding them ended after this date.
On the contrary, according to the General Financial Directorate (GFD), it does not play a role, when the tax administrator registers the accessories, since the creation and registration of the related decisive arrears (principal) is decisive.
The remission of the specified accessory does not depend on whether the tax administrator notified the tax subject of the accessory before or after 30 September 2022. Afterwhere a decisive principal arrears arose and was registered with the tax administrator by 30/09/2022, the tax subject will pay it by 30/11/2023 (or in installments) and apply for forgiveness, the tax administrator will forgive him all accessories related to the arrearage (i.e. also that which has not yet been registered), specified the Podnikatel.cz server Klára Křehlováspokesman for the GFR.
The moment of occurrence of the decisive arrears (principal) is determined according to the Act on Extraordinary Forgiveness and Extinction of Certain Debts in conjunction with the Tax Code, according to which it is the day following the expiration of the original maturity date, or alternative maturity dates, if established.
In addition to the additional payment, you must also submit an application
Anyone who wants to take advantage of debt forgiveness must also submit an application in addition to paying the principal. Those who are not sure whether and how much they owe can do so in the portal MY taxes find a list of your potential tax arrears in your DIS+ information box.
As for the timing between the payment of the principal amount and the submission of the application, it is necessary to send the payment at the earliest on the day of the application submission, so that it is clear to the tax office that these funds are to be used precisely for the payment of tax arrears within the framework of the Summer of Grace. As part of the payment of the arrears, the financial administration advises to include “Tax grace summer” in the report for the recipient.
How to apply
After completing the application in the web application, it can be submitted to the tax office. The request can be delivered in the following ways:
- In the MY taxes portal
- By email
- Data box
- By post
- In person at the post office
Extraordinary termination of some tax arrears and tax accessories
In addition to the forgiveness of accessories, some arrears of tax and accessory tax also disappeared. It concerns both natural and legal persons. This is the disappearance of the so-called trivial arrears of tax and accessories, regardless of their type (again with the above-mentioned exception of customs duty and its accessories). A minor arrears was an individual arrears of less than 200 CZK or, in the case of property tax, 30 CZK.
Some applications must be submitted to customs
However, not all taxes are administered by the financial administration, and in some cases, such as for arrears of consumption taxes, it is necessary to submit an application to the customs authorities. The customs administration has also prepared a web application in which the application can be submitted
Social security amnesty also applies
In addition to the tax amnesty, taxpayers can take advantage of similar indulgences social insurance. The principles of extraordinary forgiveness and extinguishment of certain debts in the case of social security are similar to those of tax amnesty. The waiver applies to unpaid accessories (penalties and enforcement costs), while the decisive date is also September 30, 2022. The waiver applies to social security premium payers (natural and legal persons, where a natural person is self-employed and an employer, and the premium payer is even a former premium payer).
By the end of October, according to data from the Czech Social Security Administration, 11,222 insurance premium payers filed notifications, including 8,671 self-employed persons and 2,551 employers. In the case of social insurance, however, it was also the case that those who paid the due insurance premiums within the meaning of the law before July 1, 2023, did not have to submit any notification and the remission of unpaid accessories occurred automatically by law. There were 154,000 such self-employed persons out of the total number of 302,000 self-employed persons in debt and 33,000 out of 102,000 employers.
You must notify the CSSA electronically
Anyone who wants to take advantage of the penalty waiver must report this fact to the relevant district social security administration in electronic form. The appropriate notification of the payment of the insurance premium owed can be made exclusively through the CSSZ ePortal, where it is also possible to find out the amount of the debt.
Payments will also be made for social insurance
It also applies to social insurance that the social security premium owed can be paid in installments. For debts up to CZK 50,000 (the minimum is CZK 5,000), the payment can be spread over 12 monthly installments, if the debt is higher, it will be spread over 60 monthly installments, which are due from the first day to the last day of the calendar month for which the installment is paid. However, as soon as the debtor does not pay any of the installments in the specified amount or within the specified period, the possibility to pay off the debt in installments ceases, and with it the right to forgiveness of the debt accessories also ceases.
Current data from the CSSS show that, while employers are more interested in a one-off payment of the insurance premium owed, the self-employed prefer payments in installments.
However, for the self-employed, unpaid advances for the calendar months of 2022 are not considered to be social security premium debt, and the penalty for these advances is not waived.
Read more at Měšec.cz: Do you have debts with social security? You may be able to repay them without penalty
Those who have paid the due insurance premiums within the meaning of the law before July 1, 2023 do not have to submit any notification, the unpaid accessories were automatically waived by law.