Waiver and extinction of tax accessories and penalties on insurance contributions under the new laws

The acts on the extraordinary waiver and extinction of certain tax debts and on the extraordinary waiver of penalties on social security and state employment policy contributions and enforcement costs, which follow the first two waves of the Graceful Summer campaign that took place in 2022, are now in the legislative approval phase. The Graceful Summer campaign concerned the waiver of accessory costs (in particular legal costs, interest and penalties) in the case of tax and social security contributions owed by individuals (business and non-business) and recovered by bailiffs.

Since tax and social security debts are currently recovered by bailiffs only in exceptional and justified cases, the majority of tax accessory debts and insurance debts remained unaffected by the Grace Summer project.

In the laws currently under discussion, taxpayers will be able to apply for a waiver of tax and social security contributions accessories without having to meet the condition of foreclosure.

Tax accessories, i.e. interest on late payment, interest on the postponed amount, penalties, fines for late declaration of tax and costs of proceedings, including enforcement costs, will be waived if the following conditions are met:

  • The tax accessories have not yet been paid.
  • The waiver application will be submitted between 1 July 2023 and 30 November 2023.
  • The taxpayer must pay the arrears of the taxes to which the accessories relate by 30 November 2023.

The waiver will also be granted if the taxpayer, on the basis of other conditions set out in the act, applies for the payment of the arrears in instalments between 1 July 2023 and 30 November 2023 and the arrears are paid by the due dates of the individual instalments.

The conditions for the waiver of penalties on social security and state employment policy contributions and enforcement costs are proposed in the new act in a similar way to the waiver of tax accessories.

Additionally, on the date of its entry into force – 1 July 2023, the new act should automatically cancel tax arrears or arrears of tax accessories incurred before 30 September 2022, if the arrears:

  • are less than CZK 30, in the case of tax on immovable property;
  • are less than CZK 200 in other cases;
  • did not exceed CZK 1,000 in total with any single tax administrator.
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