Deadlines for filing tax returns

Deadlines for filing tax returns

The largest ever amendment to the Tax Code also introduced new deadlines for filing tax returns. To which returns will they be applied, by when, and how will we file these returns starting in the 2020 tax period? They will affect everyone who files a tax return for personal and corporate income tax.

Under the previous rules, there were basically two deadlines for filing tax returns: (i) three months after the end of the tax period (usually the end of the period fell on 1 April), or (ii) six months after the end of the tax period (usually the end of the tax period 1 July). Within the "basic" three-month period, tax returns (natural and legal persons) were filed by all those whose returns were not processed by a tax advisor or who were not compulsorily audited by law. On the contrary, the law allowed these entities to file a return in an extended period, just until 1 July. What is changing about these rules?

In the first place, the basic three-month period, which has been in force until now, is maintained. The current three-month extension of the deadline also applies (with certain changes, which I write about below) if the tax return is submitted by a tax advisor or is a compulsorily audited entity.

A novelty is the possibility to file a tax return within an extended period of one month from the basic three-month period, i.e. by 1 May (if the tax period is a calendar year). This option can be used by all businesses that file tax returns without a tax advisor and are not required to be audited, if they also file their tax returns in an extended period (from 2 March to 1 April) in electronic form (e.g. using a guaranteed electronic signature or data box). If these conditions are met, the deadline for filing the return will be extended, and the tax administrator will assess the tax liability by 1 May. If the taxpayer files a return in paper form (it may occur with entrepreneurs of natural persons), the unchanged basic period of 3 months applies to him.

Another change, which we evaluate positively, and which also applies to the new four-month period, is based on the possibility for each taxpayer to choose (by filing a tax return) whether the tax will be assessed at the end of the basic three-month period or only during the extended period (one month or three months). The right to choose is not only held by a compulsorily audited entity, which in any case has a deadline for filing a tax return six months after the end of the tax period (whether filing electronically or through a tax advisor). Earlier assessment of the tax return can mean a faster refund for businesses of prepaid tax. It will not be necessary to wait until 1 July. For the tax administrator to assess the filed return by 1 April (within the basic three-month period), the tax return must be filed (either by the taxpayer itself or by its tax advisor) by 1 April at the latest. In that way, the tax administrator receives a signal that the taxpayer wishes to assess its return within the basic (non-extended) period. If the return is submitted after the expiry of the basic three-month period, the tax administrator will automatically assess the tax within an extended period (either on 1 May or 1 July).

The extension of the basic deadline by one month to all those who communicate with the tax administrator electronically (file a tax return in this way), as well as the choice of the moment of assessment of the tax return are the two main novelties of the new legislation. However, the new possibilities are connected with the above-mentioned conditions, which must be fulfilled for the desired result to be achieved.

Besides the amendment to the Tax Code, the deadline for filing a tax return for road tax for the 2020 tax period and real estate tax for the 2021 tax period was postponed due to the decision of the Minister of Finance within the framework of tax measures related to government measures in the fight against COVID-19. Tax returns can be filed without penalty (fines for late filing of returns and interest on arrears for late payment of tax) until 1 April 2021.

And currently for this year, on 8 March 2021, the government approved the release of the 16th General Pardon by the Minister of Finance, which postpones the deadline for filing a tax return and paying income tax by one month. The pardon also extends the VAT waiver for respirators of protection class FFP2 and higher by another two months until 3 June 2021.

Through the waiver of interest on arrears and the fine for late tax returns for income tax, the deadline for paper filing is effectively postponed to 3 May 2021, and for electronic filing until 1 June 2021.