Tax remittance - New GFD Instruction D-67

In February this year, the tax world saw the light of a new, slightly revised and updated instruction of the tax administration on the projection of tax accessories. At the outset, it should be noted that it does not bring a revolutionary change in the tax administrator's approach to this issue. As will be shown below, in some cases it expands the existing possibilities of remission, while in other cases it tightens the conditions for possible remission of tax accessories.

Before we focus on the specific changes, it is worth explaining what the General Financial Directorate's guidance actually means for practice and what it is good for. According to the law (the Tax Code), it is possible to waive certain tax accessories, namely: (i) penalty, (ii) penalty for late declaration of tax and (iii) interest on late payment. This is always an act of administrative discretion of the tax administrator in a particular case. In order to unify administrative practice across all tax authorities, the General Financial Directorate issues (methodological) guidelines to ensure that the fundamental principles of the rule of law are fulfilled. Although the Guideline on remission specifies specific cases in which the tax administrator should grant the taxpayer's request for remission (in full or in part), it is not a "closed" list of situations worthy of remission of the tax increment incurred. The tax authority is obliged to assess each reason stated in the application.

 

On the new GFD Instruction D-67. What changes?

Its concept is close to the methodology of the Customs Administration of the Czech Republic

The Instruction expands the grounds for waiving the penalty for late declaration of tax by three:

• Situation: the tax claim was filed late by the taxpayer, but the tax was paid in full at the time of the original or substitute due date in cases where the tax was due (also applies to cases of an established tax credit or loss). Remission: 70% of the penalty.
• Situation: the delay in filing the tax return to which the penalty for which waiver is sought was a maximum of 15 calendar days. Remission: 70 % of the penalty.
• Situation: a penalty was incurred for late submission of a tax claim by a taxpayer without a request from the tax administrator. Remission: 50% of the penalty.

However, in addition to the positive changes, the instruction also contains "maluses" in the form of the inclusion of a new circumstance reducing the total waiver by up to 50%. This is the situation of more than one tax arrears subject to tax execution in the last three years. One of the categories assessing the adverse economic and social situation of the taxpayer has also been dropped from the Guideline. Newly, taxpayers earning more than forty-eight times the minimum wage for the previous tax year will not qualify for the higher remission percentage (the remission was increased by 20%).

The chapter on the relationship with public support has also been removed from the Guideline. However, this implies that the tax authority would not have to address the relationship with public aid in relevant cases. It is linked to this by EU rules.

Finally, the instruction took effect on 1 March 2025 and applies to all proceedings initiated by a request for remission after that date. It will also apply to previously submitted applications which have not been decided by the tax authorities by 1 March 2025.

In practice, it has happened to us on several occasions that a relevantly substantiated request for remission of the taxpayer's interest has been rejected by the tax administrator and "disposed of" with reference to the instruction, on the grounds that the reason claimed by the taxpayer to be worthy of remission is not explicitly defined in the instruction. Such a procedure by the tax authority, as we have indicated above, is not correct and can be quite effectively defended against.

Autor: Vít Křivánek, Václav Čepelák