The government has approved some tax mitigation measures related to the effects of government measures
In connection with the ban on certain activities due to the current epidemiological situation and the growing spread of coronavirus, the Ministry of Finance has issued several measures in the area of taxation, which it describes as a large liberation tax package. In fact, the scope of these mitigation measures is very small, both in terms of the tax obligations it is intended to relieve and the range of persons concerned.
The assistance is aimed at selected entrepreneurs who are operators of facilities affected by a government crisis measure prohibiting or restricting certain activities. These are, for example, operators of restaurants and bars, sports facilities, theaters, concert organizers and the like, who in the period from 1 June 2020 to 30 September 2020 had the majority of their income from the listed activities, which were from 14 October, prohibited or restricted by the government.
These entrepreneurs can now take advantage of the reliefs described below. It is important that the measures referred to in points 1 to 3 do not apply automatically, but only on condition that entrepreneurs notify their tax administrator that the necessary conditions have been met. The Financial Administration has already stated on its website that it is also possible to send notifications by e-mail. At the same time, it can be expected that more detailed information on the practical implementation of these measures will be published on the Financial Administration's website soon.
It is important to note that the ban on activities in connection with the government's crisis measure applies to a significantly larger circle of entrepreneurs than is affected by this liberation package. For example, the ban on the operation and use of sports fields indoors, gyms and fitness centers affects not only the operators of these areas, but also the coaches who run their business in these areas. The ban on concerts and theater performances does not only apply to the organizers, but especially to singers, actors and many other free professions or trades.
We therefore note that persons who are not automatically subject to these tax measures but are nevertheless affected by government prohibitions may apply for tax relief individually to their tax administrations. At the same time, the waiver of administrative fees for submitted applications introduced by the Ministry of Finance as part of the spring mitigation measures still applies.
1. Possibility to defer payment of VAT
The Ministry of Finance forgives the above-mentioned entrepreneurs interest on arrears for late payment of VAT for September 2020, October 2020 and November 2020 or for the 3rd quarter of 2020, but only on condition that the tax is paid to the tax administrator's account by 31 December 2020 Thus, the VAT payment for the mentioned periods is effectively postponed until the end of 2020. However, we would like to point out that tax returns and control reports must be submitted within normal deadlines; the waiver applies only to the tax payment itself.
2. Waiver of advances on personal and corporate income tax
The waiver applies to advances due in the period from 15.10.2020 to 15.12.2020, which the above-mentioned entrepreneurs do not have to pay. The measure has no effect on the tax liability, the aim is only to bridge the temporary lack of funds and defer payment.
3. Waiver of advance on road tax
For road tax, the waiver applies to all advances due in 2020.
4. VAT waiver for the free provision of selected goods or services
As in the spring relief measures, the Ministry of Finance waived the VAT that would have to be paid on the gratuitous supply of goods or services to entities that help mitigate the effects of the spread of coronavirus infection. These are mainly test kits or devices and instruments used to diagnose COVID-19, drapes, respirators, protective clothing, as well as thermometers, medical devices, but also disinfectants or raw materials for their production or provision of services for social services. Financial Bulletin No. 22/2020 contains a precise list of goods to which the waiver applies. The VAT waiver applies to goods delivered in the period from 1 October 2020 to 31 December 2020. The right to deduct VAT related to the acquisition of these goods provided free of charge will remain with the donor.
For the sake of completeness, we add that, in addition to these new measures, income taxpayers can use the previously approved institute of recovery of tax loss, which we have already informed in more detail here (only in Czech).