After a lengthy period of interpretive ambiguity, the Extended Chamber of the Supreme Administrative Court (SAC) has issued a landmark judgment, departing from its previous case law regarding the deadline for filing an additional tax return for a lower tax.
The deadline for filing an additional tax return is regulated by the Tax Code, which contains different deadlines for filing an additional tax return for a higher tax and an additional tax return for a lower tax. If the taxpayer discovers that the tax should be higher than the last known tax, they are obliged to file an additional tax return by the end of the month following the month in which they discovered this fact (subjective deadline). This obligation lasts for the entire duration of the tax assessment period (objective deadline). It has long been unclear how to apply the deadline for filing an additional tax return for a lower tax if the taxpayer discovers that the tax should be lower than the last known tax. The previous case law of the SAC interpreted the legislation as meaning that if a taxpayer wishes to correct the tax and file an additional tax return for a lower tax, they must do so within the subjective deadline, as in the case of a tax return for a higher tax.
Opinion of the Extended Chamber of the SAC
According to the Extended Chamber of the Supreme Administrative Court, the taxpayer is entitled to file an additional tax return for a lower tax within the tax assessment period. The subjective deadline (by the end of the month following the month in which the taxpayer discovered that the tax should to be higher than the last known tax) does not apply to the submission of the additional tax return for a lower tax. The opinion of the Extended Chamber of the Supreme Administrative Court shall be followed by both administrative courts and the tax authority.
As a result of this landmark judgement, taxpayers are entitled to file an additional tax return for a lower tax at any time as long as the objective tax assessment period (usually three years) has not expired. The tax authority can no longer reject additional tax returns for a higher tax that were not submitted within the subjective deadline. If this has happened in the past and the tax assessment period has not yet expired, the additional lower tax return can be resubmitted. At the same time, the tax authority cannot impose a penalty for late submission of an additional tax return for a lower tax. In the practice of some tax authorities, we have observed the imposition of a penalty for non-compliance with the subjective deadline for filing an additional tax return for a lower tax. In light of the judgment of the Extended Chamber of the Supreme Administrative Court, these penalties should be revoked as unlawful.
For the sake of completeness, it should be noted that there are special deadlines for filing a tax return for a lower tax under special tax regulations. For example, the provision on the correction of the amount of tax of the Act on Value Added Tax provides that the correction of the amount of tax cannot be made after a period of three years following the end of the tax period in which the obligation to declare tax on the original transaction arose. When filing an additional tax return for a lower tax, it is therefore necessary to consider both the general regulation in the Tax Code (objective deadline) and the special regulation in the specific tax law (special deadline).
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