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COVID-19: Possible waiver of penalties

Source PWC

The Ministry of Finance has not extended the deadline for the submission of VAT reports or payment of VAT liability as such. In terms of VAT, the following measures apply:

  • A general waiver of the CZK 1,000 penalty for failure to submit a control statement, only if the liability to settle such a penalty arises in the period from 1 March 2020 to 31 July 2020.
  • If the VAT payer is able to prove the failure is in any way related to the COVID-19 outbreak (typically an illness or quarantine of accountants or other key employees whose absence made it impossible to fulfil VAT obligations; a substantial drop in revenues due to the outbreak), the following measures apply:
    • A waiver of the late payment interest.
    • A waiver of the interest connected to the deferral of VAT payment or VAT payment instalment schedule.
    • An automatic waiver of the sanction for the late submission of the VAT return if the tax office grants one of the two above waivers as well.
    • A waiver of other sanctions for the late submission of the control statement (all sanctions from CZK 10,000 to CZK 50,000). This applies to cases when the appeal is issued within the period of 1 March 2020 to 31 July 2020.
    • A general waiver of administrative fees for the filing of the respective requests.

All sanctions can be waived only after the related VAT liability is paid and the respective control statement(s) are submitted.

There is a waiver of VAT payment for the free-of-charge delivery of selected medical supplies to mitigate the effects of the coronavirus outbreak. These include, for example, respirators, masks, gloves, face shields, or disinfectants and raw materials for their manufacture. The exact definition of the goods is given in the Financial Bulletin. The waiver covers the period from 12 March 2020 until the end of the state of emergency.

 

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