The Senate of the Czech Republic has discussed a draft of the amendment to the Tax Code and returned it with adjustments back to the Chamber of Deputies, where the amendment was rejected. The major adjustments proposed by the Senate primarily concerned a change of the method of initiating a tax audit.
According to the wording presented by the Chamber, a tax audit would be initiated upon delivering a notification of initiation of a tax audit. However, the Senate proposed that the tax inspection could only be initiated in this way if the tax administrator begins without undue delay to take steps to establish tax liabilities or to audit the statements of the taxable entity. Otherwise, the tax inspection would be initiated on the date when the tax administrator actually takes these steps. Therefore, in reality the process of initiating a tax audit would remain in a similar mode as the one that applies today.
The Senate has also proposed to delete the controversial changes regarding the fiction of delivery of a payment assessment to the taxable entity and related deadline extension for the refund of value‑added tax deductions from the existing 30 days to 45 days. In the meantime a special law has been proposed due to the coronavirus pandemic. It contains a special provision to maintain the 30‑day deadline for the payment of excess VAT deduction for the calendar year 2020.
Based on the amendment, the institute of maximum length for which default interest is applicable, i.e. 5 years, could thus once again return to the Tax Code.
Nonetheless, on 22 April 2020 the Chamber of Deputies did not approve the draft of the amendment to the Tax Code in neither of its two possible wordings and hence the proposal was not approved. The fate of the amendment to the Tax Code thus remains uncertain.