Deadline for income tax returns arrives – but filing (slightly) late possible

Foto: Tomáš Adamec, Archiv des Tschechischen Rundfunks

Queues have been forming at tax offices around the Czech Republic ahead of Wednesday’s deadline for filing income tax returns. Those who submit their documentation after the last day of March may face fines.

Photo: Tomáš Adamec
By the end of last week over one million tax returns had been handed in, accounting for around two-thirds of the country’s individual income tax payers and firms.

Those who fail to get their pink forms in on time face possible financial sanctions of 0.05 percent of the amount due for every day’s delay, according to Financial Authority spokesperson Jitka Ježková. In the case of tax rebates, the fine is 0.01 percent.

However, tax offices are not complete sticklers when it comes to enforcing the deadline. They tend to turn a blind eye when filing is not so tardy, the director of the Income Tax Department of the General Financial Directorate, a section of the Financial Authority, told Czech Television.

Radim Bláha told the broadcaster that his officials give five days’ grace. Because the Easter holiday falls on the coming weekend this year late filers will have until April 9 before they need to start really worrying, Mr. Bláha said.

Those who employ a tax advisor have a different date circled in their calendars – they have to file income tax returns by July 1.

But in either case filing is a serious obligation. The fine for omitting to do so starts at CZK 500,000 – and is levied even if the company or individual isn’t liable to pay any income tax whatever.

The forms can be delivered by hand, sent via mail or filed in electronic form using a “data box”. However, the majority of people still bring them to tax offices in person.

In around 200 smaller municipalities that lack tax offices locals can hand their forms to roving officials. Last year about 25,000 tax forms were filed in that manner.

Filling tax returns in the Czech Republic is not made any simpler by the fact the instructions on how to do so are rewritten with some frequency.

The president of the Chamber of Tax Advisors of the Czech Republic, Jiří Nesrovnal, told Czech Television that the relatively complicated income tax system makes life more difficult for his organisation’s members.

It changes often and is hard to predict, so mistakes can easily be made, Mr. Nesrovnal said.

Not all errors are down to the complexities of the regulations. According to the Chamber of Accountants, around a third of entrepreneurs provide distorted figures to the tax authorities. They predict a slight increase in the practice this year.

Last year individuals in the Czech Republic paid over CZK 98 billion in income tax, with companies having to cough up around CZK 10 billion.

Banks are among the most generous contributors to the state coffers. Česká spořitelna paid the most income tax in 2013, followed by power giant CEZ and another bank, Komerční banka.