An amendment to the VAT Act (Act No. 235/2004 Coll.) which came into force on 1 January 2023 has brought changes in the area of the control report. The electronic form for submitting the report has not changed, and neither has the structure of the data and the way in which it is to be entered and submitted.
The change concerns notices whereby the tax authority summons the taxpayer to file a control report.
Extension of the deadline for replying to the official request
If the tax authority finds that the data in a previously submitted control report suffers from discrepancies, it will call upon the taxpayer in a formal notice to file a supplementary, or additional, control report to confirm or rectify the data.
Until 31 December 2022, this time period for submitting the supplementary control report was 5 working days from delivery of the notice.
As of 1 January 2023, this time period only applies if the notice was not delivered via databox.
If the official request for submission of a supplementary control report was delivered via databox, then the time period is 17 calendar days from the moment of delivery to the databox, effective as of 01/01/2023.
The time period for responding to the notice will expire irrespective of when the data message was “picked up”, i.e., the notice is deemed served as of the date of delivery to the recipient’s databox, irrespective of whether it was ever “opened and received”. Delivery here is understood to mean that the data message has become available to the recipient, i.e., the moment in which it can be called up on-screen.
Penalties for failure to submit the control report
If the taxpayer does not respond to the call for a supplementary VAT control report within the statutory period, then the tax authority may impose a fine in the amount of CZK 30 000 (or possibly half this amount); this applies even if the taxpayer eventually files a correct report which confirms the accuracy of the data contained in the original (regular) VAT control report, but does so only belatedly.
If the taxpayer does not submit any VAT control report and is being summoned by the tax authority, the additional time period in 2023 is (as previously) 5 days from the date on which the notice (reminder) has been published (on pain of a penalty in the amount of CZK 10 000 – or half this amount, see below). This obligation hits even taxpayers who were not strictly obliged to file a control report (but called upon to do so individually by the authorities). In such a case, taxpayers continue to have the option (in line with established practice) to send an instant response to the notice by choosing the boilerplate answer “I am not obliged to file VAT control reports”.
If the control report is not filed even within the additional time period, then the penalty is CZK 50 000 (possibly reduced by half).
Effective as of 1 January 2023, the amendment introduces a reduction by half of certain penalties (as laid out in this article), to the benefit of the following categories of taxpayers: natural persons; limited liability companies owned by a natural person as the sole shareholder, and legal entities which report VAT on a quarterly basis.
Changes have also been made with respect to the practice of waiving penalties for clemency – cf. instruction D-29 by the General Fiscal Directorate: here.
As of 1 January 2023, certain penalties won’t have to be paid (i.e., specifically, CZK 1,000 for late submission of a control report before being summoned or CZK 10,000 (possibly reduced by half) for submission during an additional time period after being summoned), provided that this late submission was the first infraction of its kind during the given calendar year. This waiver is automatic, i.e., no request must be filed with the tax authorities. However, taxpayers who nonetheless receive a penalty notice are well advised to contact the tax authority at their earliest convenience to resolve the matter.
The finance administration has posted information on the changes concerning VAT control reports online, at this website.