Financial Administrative Authority

Establishment of new data boxes for financial authorities and their regional offices and new bank accounts for tax payments

As noted in the last edition of Tax News in 2012, on 1 January 2013 the bodies of the Czech Financial Authority underwent a substantial change and new financial offices were established in regional cities and Prague. The original 199 financial offices were transformed into regional offices of the newly established financial authorities.

In connection with these changes, new fully functional data boxes were established and activated by law on 1 January 2013 for the new financial authorities, their regional offices, the Specialized Financial Authority, and the Appellate Financial Directorate. The former data boxes ceased being functional on 1 January 2013. The new data box IDs are available on the Financial Administrative Authority’s website.

New bank accounts for tax payments were opened on 1 January 2013. All necessary data are available on the Financial Administrative Authority’s website.

Should paid taxes be transferred to the original bank accounts, they will be automatically transferred to the new accounts. Such retransferring should take place throughout all of 2013.

Regional Offices

Regional offices are the internal organizational units of the financial authorities and act on their behalf. The authority and territorial scope of the regional offices have not been defined. No person or entity (tax subject) can be assigned to a regional office. Regional offices have their own data boxes and filing rooms.

Filings provided in the filing rooms or data boxes of a regional office will be equivalent to the filings that would have been provided to the data box or filing room of the relevant financial authority.

Unused Vacation Time

Pursuant to the new wording of Section 218 of the Labour Code effective as of 1 January 2012, an employee’s right to vacation does not cease to exist if the vacation to which the right commenced in one calendar year is not used by the end of the subsequent calendar year. In certain cases, vacation thus may be drawn after three or four years.

According to the General Financial Directorate, the change does not affect bookkeeping or the Income Tax Act.

According to the General Financial Directorate, the employer should record vacation pay as a cost in the year in which the vacation is used (for the current or a preceding period), i.e. when an employee is entitled to receive pay for the used vacation.

The claim for vacation pay applicable to a certain year but not used in that year cannot be recorded in costs as a tax-deductible estimated liability. Although a reserve may be used to record an unused claim to compensation for vacation pay, the reserve will be excluded from the tax base. 

The only exception when pay for unused vacation time may be recorded as an estimated liability in compliance with accounting regulations is when a claim to compensation for a salary arises in favour of an employee in respect of unused vacation that will be paid in the subsequent accounting period. At present, such a claim may arise in favour of the employee only after his/her employment has terminated.