Accounting in the Czech Republic: Is it possible to correct an error in a tax return?

Have you realized you made a mistake on your tax return? Depending on when you filed your return and whether you are required to file electronically, your approach to this issue will vary.

In some circumstances, you will need to file an amended return, whereas in other situations, you will need to file an extra return. However, in both scenarios, individual entrepreneurs must submit a declaration electronically. If you need advice, you can seek help in this matter from an outsourced accountant in Prague. In this article, we will look at the most common options with errors in declarations that we have encountered in practice.

How to fix a mistake on your return before the filing deadline

The basic principle of correcting errors in declarations in the Czech Republic has remained unchanged for many years. If you file a return and uncover a mistake before the deadline, you only need to file a corrected return. You may file several modified returns, and the tax authorities will consider the most recent one to be valid.

How to correct an error if the deadline for filing a return has expired

If you discover an error on your return after the filing deadline, you must file an additional return. If you owe more tax than you reported on your return, you must file an additional return by the end of the month following the month in which you discovered it and pay the difference by the same deadline. While the tax assessment period lasts, this obligation remains.

The final tax amount is the amount finally determined by the tax authority during the proceedings on this issue. In the Tax Code of the Czech Republic, a tax is understood not only as a tax (or a monetary transaction that the law calls a tax, duty, or fee) but also as a tax deduction for VAT, a loss for income tax, or other forms of taxation and amounts (for example, interest, penalties, etc.). Therefore, you must file an additional tax return not only if the tax itself increases, but also if you find that the tax loss or excess deduction should be less than the last known tax.

If you paid more taxes than you should have

If you find an error that leads you to pay more tax than necessary, you aren’t required to file an additional tax return, although you may do so. Once again, you have until the end of the month following the one in which you discovered it. In this case, you must request a refund of the overpayment. The IRS will refund any overpayments within 30 days. The timeframe starts from the final day of filing the declaration.

In what cases can you not submit an additional declaration?

However, if the instructions or tax negotiations determine the tax, there are situations where filing a supplemental return or supplemental statement to obtain less tax is not possible.

The supplemental tax return or application must specify the discrepancy from the last known tax liability, the date of discovery, and the reason for filing. The declared additional tax is due within the period that replaces the payment deadline, which must coincide with the deadline for filing the additional declaration.

The deadline for filing a tax return in the Czech Republic is May 2

Although the main deadline for filing tax returns in the Czech Republic has remained unchanged for a long time (until the beginning of April), for several years now, in some cases, it has been possible to file filings even before May 2. This is because taxpayers who file their returns electronically have the option to extend the filing deadline by one month. Therefore, they can file their return until Thursday, May 2, 2024 (this also extends the deadline for paying additional taxes until May 2).

In addition to receiving an extra month for filing returns electronically, taxpayers who miss even the extended deadline will incur a penalty. In other words, those who did not have time to file their income tax return by the beginning of April can file it electronically by the beginning of May without the risk of receiving a fine. Those who missed even the May deadline can hire a tax consultant and file a return without penalty until the beginning of July. You can contact our accounting services company in Prague and get advice on this issue.

However, keep in mind that last year almost all sole proprietors were required to install post office boxes, which entails the obligation to file returns online. Thus, most sole proprietors must file their returns electronically by May 2, 2024.

When to submit updated and additional declarations

The fact that there are two deadlines for filing declarations has made it more difficult to correct errors. There are a few choices.

In fact, the deadline for filing a corrective or additional return is governed not only by the requirement or ability to file a return electronically but also by the time period during which the ordinary return was actually filed.

An example of filing an amended tax return

You are a sole proprietor with an email account; you do not use a tax advisor (you must file your return electronically, so the filing deadline is May 2), and now (by May 2), you have discovered that you made an error on your return.

If you didn’t file a correct return until after April 2 (the main deadline), you simply file an amended return.

However, if you filed a regular return before April 2, you must file an additional return (see above for deadlines).

If a person is not required to file a regular tax return electronically, they can file an adjusted tax return electronically with an extended deadline of May 2 after the main deadline (after April 2, 2024). It should also be electronic, not paper. So advises Thomas Weiss, a spokesman for the General Financial Administration.Navigating Czech accounting regulations can be tricky. Let our experienced team handle the complexities for you, so you can focus on growing your business. You can contact us for outsourced accounting in the Czech Republic (Prague).

Sources 

https://www.podnikatel.cz/clanky/udelali-jste-chybu-v-priznani-s-opravou-je-to-nyni-zamotanejsi/