Tax code amendment to change tax administration inspection procedures as of January 1, 2021

Authors: JUDr. Lukáš Duffek, Mgr. Martin Dolnák, Mgr. Simona Mlýnek Štursová

On January 1, 2021, an extensive amendment to the labor code is expected to enter into force, which among other things will have a major impact on the legal regulation of the initiation, process and termination of tax inspections and related tax administration inspection procedures. Due to this there will be changes in, for example, the conditions for transferring documents from the search section of the records to the public records, major changes to the conditions for initiation and termination of tax inspections, as well as to the disposal of the objects of tax inspections; new rules will be introduced for repeated inspections, and the option to pass from the procedure for the removal of doubts to a tax investigation will be regulated in more detail, as will be the procedure for removal of doubts itself.

This amendment will also reflect the conclusions of the Supreme Administrative Court, which recently held that if a tax administrator commences a tax inspection without requesting that the tax-payer file a supplementary tax return (in the case where the tax administrator was relevantly informed that such supplementary tax return had been submitted by the tax-payer), no penalty amounting to 20% of the reassessed tax sum can be imposed on the tax-payer.

According to the Tax Code, tax penalties should also not be imposed in situations where tax is reassessed on the basis of a supplementary tax return or supplementary statement.

The Tax Code amendment will definitely bring about a fundamental change in tax administration investigation procedures, and it may be expected that in the near future the number of tax disputes between tax-payers and tax administrators regarding the administrative interpretation of the new procedural regulations will increase.

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