Taxpayers for whom a data box has been set up by operation of law or who have a statutory obligation to have their financial statements audited must submit filing forms (e.g. income tax return) electronically in the prescribed format and structure. Failure to comply with the mandatory electronic filing method or filing a tax return in an incorrect format or structure is a formal defect in the filing, which may result in a fine of CZK 1,000 if the defect is not remedied at the request of the tax authority. The incorrect choice of a filing method may also affect whether the deadline for filing the tax return is met. Failure to meet the deadline for filing the tax return is punishable by a fine of up to CZK 300,000 and may result in the incurrence of interest on late payment.

Due to the significant expansion of the number of taxpayers for whom a data box has been established by operation of law as of 1 January 2023 (mainly all natural persons engaged in business, but also, for example, foundations, associations or communities of owners), the tax authorities have in practice noticed an increase in the number of defects in filings, especially in connection with personal income tax returns. Therefore, in view of the principles of welcoming approach and reasonableness, the tax administration has adopted an exceptional tolerance for filing defects consisting of non-compliance with the electronic filing method and the prescribed format and structure of the data message for taxpayers for whom a data box has been newly established as of 1 January 2023.

The information on actions taken by tax administrator regarding the elimination of defects in the filing and assessment of tax in connection with the establishment of data boxes by operation of law in the first quarter of 2023, published on the website of the tax administration, shows that:

• Tax returns filed before 3 April 2023 incorrectly in paper form or in electronic form but in an incorrect format or structure will be processed by the tax administrator as standard filing without defects; a formal notice to correct defects will not be issued. The assessment renders these defects in the filing irrelevant as they are removed ex officio. The deadline for filing the tax return by 3 April 2023 is deemed to be maintained.
• Tax returns filed between 4 April 2023 and 2 May 2023 incorrectly in paper form or in electronic form but in the wrong format or structure are also processed by the tax administrator as if they were without defects; no formal notice to correct defects will be issued. For defective paper filings, the submission deadline of 2 May 2023 is only maintained if the taxpayer has also corrected the defect in the filing by 2 May 2023. In such a case, the tax administrator will not impose a penalty for late filing.
• From 3 May 2023 to 2 June 2023, the tax administrator’s tolerance will only be for tax returns filed electronically but in an incorrect format or structure. Where possible, the tax administrator will informally notify taxpayers of defects in their filings for the purpose of correction. Penalties for late filing will apply, and for filings made incorrectly in paper form, it should be taken into account that the statutory deadline for filing the tax return has already passed on 3 April 2023. This will also affect the amount of interest on late payment, if any.