Financial administration in figures: what the controls focus on and where digitalization is heading

Tax echo – an increasingly used tool

In 2024, the Financial Administration launched the Tax Echo project, which aims to notify taxpayers of irregularities in their tax returns in an informal way. The advantage of this tool is that it allows for the voluntary correction of detected irregularities before the formal control procedures are initiated. So far, the Tax Echo has focused on shortcomings related to personal income tax, with the last stage of the Tax Echo from December 2025 concerned the obligation to declare income from gambling, while the previous stages targeted, for example, incorrectly applied discounts for spouses. On the basis of the first two stages of the Tax Echo, more than CZK 52.3 million was voluntarily declared. The results of the project indicate that the Financial Administration will continue to use the Tax Echo.

The Financial Administration often says that thanks to advanced analytical tools, it performs inspections more efficiently year after year. In 2025, it carried out 11.3% fewer tax audits compared to 2024, but the volume of additional assessments increased by CZK 1.2 billion. The annual report shows that all three main taxes – VAT and personal and corporate income taxes – contributed to the higher additional assessments.

In practice, this means that if a tax audit is initiated in your country, it is usually not a random selection. Financial administration often bases itself on specific risks identified through its analytical tools.

Trends in the activities of the Financial Administration: what do the auditors focus on?

In 2025, the Financial Administration focused mainly on detecting discrepancies between the data reported in individual tax returns. For example, it checked the consistency of the data contained in the control reports and VAT returns with the data reported in the income tax returns.

In the area of VAT, inspections focused on the right to deduct VAT dominate. At the same time, the Financial Administration examined both the proof of the right to deduct and the involvement of taxpayers in fraudulent chains.

As part of corporate income tax, the Financial Administration focused on entities operating through online platforms. Transfer pricing was an equally important area. Last year, the Financial Administration even cooperated with Charles University to create a risk model to help tax administrators target their control procedures even more precisely. At the same time, the annual report states that the Financial Administration continues to specialize some of its employees in the area of transfer pricing.

Furthermore, the Financial Administration also focused on the tax implications of group restructurings. In terms of the number of international negotiation proceedings for the avoidance of double taxation related to transfer pricing, the tax administration dealt with a total of 62 cases in 2025, which represents an increase of almost 20% compared to 2024.

The Financial Administration has more and more information from abroad

Today, tax audits do not end at the borders of the Czech Republic. The tax administration also uses information obtained from abroad in tax administration and cooperates with the tax administrations of other countries. In 2025 alone, it obtained approximately 156 thousand records of Czech sellers as part of the reporting obligation of digital platforms, while it handed over almost 10 thousand records to its foreign partners.

The Financial Administration does not stop automating

In 2025, the Financial Administration continued to modernize its electronic systems.

Adjustments have been made to the system, thanks to which the interest on the incorrectly determined tax will be refunded automatically, without the need for the taxpayer to submit an application.

Automation has also affected the recovery of tax receivables. Thanks to the amendment to the Financial Administration Act, arrears can now be recovered nationwide.

What should you take away from the annual report?

The annual report confirms several trends that are likely to affect the activities of the Financial Administration in the coming years. We consider the following trends to be the most important:

• Checking the right to deduct VAT remains one of the main priorities of the Financial Administration and it can be expected that this will continue to be the case in the future.
• If you are concerned about transfer pricing, it is now even more important to have convincing evidence such as internal directives, as the financial administration is paying more and more attention to this area.
• Auditors of the Financial Administration no longer carry out “blind” inspections. If a tax audit is initiated in your country, there is a high probability that the tax administrator has already identified a specific risk or irregularity.