Since 2016, Tax Offices can carry out search activity and conduct tax audit procedures with taxable entities throughout the Czech Republic. These activities fall under a “selected competence of Tax Offices”. As the selected competence can be performed by any Tax Office, questions arise in practice as to the situation with powers of attorney that a taxable entity uses with its locally competent tax administrator (the “tax administrator of registration”) or with the tax administrator that is currently performing the selected competence with the taxable entity (the “active tax administrator”).

Methodological solution

• A power of attorney related to the selected competence submitted with the tax administrator of registration is also effective in relation to the active tax administrator. In accordance with the principle of cooperation, the active tax administrator may, in the context of the first act related to the selected competence, instruct an agent of the taxable entity (or the taxable entity) on effects of the relevant power of attorney in relation to the active tax administrator.
• The tax administrator of registration must always inform the active tax administrator immediately after a new power of attorney has been submitted or the scope of the existing power of attorney has been modified or terminated.
• The above-stated rule for the use of a power of attorney submitted with the tax administrator of registration will also apply in the case of the search activity when it is carried out by the active tax administrator in the context of proceedings and in cooperation with the taxable entity.
• The power of attorney, relating in its scope to acts related to the selected competence, submitted with the active tax administrator is also effective in relation to the tax administrator of registration to the extent of those related acts. Both the taxable entity and their agent must be informed of this transfer of power of attorney, and both have the possibility to exclude it by their demonstration of will.

Powers of attorney for representation before “all tax administrators”

In the event that the power of attorney is submitted to the tax administrator “for representation in all matters before all tax administrators”, the tax administrator is not obliged to send out copies of the power of attorney automatically to all tax administrators. However, the taxable entity or their attorney may demonstrate the authorisation by referring to the power of attorney previously submitted with another tax administrator. The tax administrator with whom the power of attorney was submitted is obliged to confirm the submission of the power of attorney and provide a copy of the power of attorney at the request of the other tax administrator. In the case of confirmation and provision of a copy, the power of attorney will be submitted with the other tax administrator at the time when the taxable entity has unambiguously (and in the form of a filing made in writing or orally in a report) expressed their will that the power of attorney submitted with the other tax administrator will also be effective in relation to such a tax administrator.

The new methodological guidelines are available on the website of the Financial Administration.