Managing taxes online? 

Digitalisation helps companies overcome the coronavirus crisis

Measures adopted by the state in connection with the coronavirus pandemic have not only showed us that there are many tools for spreading out tax payments over time, but also that taxes can be administered remotely in an efficient way as well. Does your company contend with tight cash-flow? Are you confronted with tax obligations you are unable to meet? Do you need a better overview of your payments? Find out more about how to cope with these scenarios and how your company may benefit from introducing the so-called "smart tax office“.

Addressing the lack of funds through deferring the tax payment

We always recommend actively resolving any potential debt to the tax office in order to avoid enforcement proceedings by the tax administrator. One of the ways to prevent such situation is to defer the tax payment. Several companies have been confronted with significant diminishing revenues or cash flow shortfalls due to the government measures adopted in connection the COVID-19 pandemic. In such cases, any further payments may endanger companies’ business activities. If you find yourself in a similar situation, we recommend that you apply for the so-called “tax deferral” or a payment schedule. If your payment problems arise from the effects of the pandemic, you will accrue no default interest from March 2020 to the end of the same year. In other cases, the interest will be decreased from 14% to 7%. In addition, this reduced interest may be subject to partial remissions.

Extending the possibilities for the remission of penalties

Late or incorrect payments of taxes are subject to high penalties and default interest, which can fundamentally endanger the company in these difficult times. However, the current methodology of the financial administration significantly extends the possibilities for at least a partial remission of these penalties. Nevertheless, it is necessary to know these options in advance and adapt the procedure accordingly.

Different setup of regular prepayments and retroactive application of tax loss

In justified cases, the tax office may also set a different amount of regular prepayments or retroactively cancel the prepayments for the entire tax period. In cases where revenues do not reach the amounts that had been used for setting up the prepayments from the previous periods, the prepayments could be reduced in this way. In certain market segments, prepayments are automatically subject to remission. From 1 July 2020, it is possible to claim a tax loss not only in the following tax periods, but also in the two preceding tax periods, namely up to CZK 30 million. At the same time, you can claim a new tax loss that is yet to occur this year.

Prevention and increase in efficiency through the so-called smart tax office

Recent months have shown that several companies still do not use all electronic options the Czech legislation offers. Due to this fact, there were cases where tax was paid late and high penalties were accrued unnecessarily or, in an extreme case, the tax office pledged a company’s assets. Therefore, we have prepared a workshop for you, through which we will push your company into the digital age: we will help you set up a smart tax office that will enable you to speed up your internal processes and save costs. You can come out stronger from the current situation and manage your taxes more efficiently than ever before.

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