Extension of the Deadline for the Tax Assessment when an Additional Tax Return is filed

The subject of CC is the extension of the tax assessment deadline when an additional tax return is filed, where the tax authority assesses the same amount of tax as declared by the taxpayer, provided that the additional tax return is filed less than 12 months before the tax assessment deadline expires.

The Tax Code specifies situations in which the deadline for the tax assessment is extended, interrupted, or suspended. The deadline for the tax assessment is extended by one year if any of the specified actions occur within the last 12 months before the expiration of the tax assessment period. Specifically, this includes the submission of an additional tax statement or a call to file an additional tax statement, provided that such a call resulted in an additional tax assessment; notification of a decision on tax assessment; initiation of proceedings for extraordinary legal remedy or supervisory measures; notification of a decision on legal remedy or supervisory measures; or notification of a decision declaring the nullity of a decision assessing the tax.

When a taxpayer files an additional return, the tax authority may either initiate a tax audit, procedure for the removal of doubts, or the tax authority assesses the tax in the same amount as declared in the additional tax return. If the tax authority assesses the tax in the same amount as declared by the taxpayer, it is not required to notify a taxpayer of this with a payment order. This is known as a tacit tax assessment, i.e., a situation where the tax authority assesses the tax silently, without objections. In such a case, the tax authority files the additional payment order in the file, and the notification is subject to the fiction of delivery. The day of delivery is considered the last day of the deadline for submitting the additional tax return.

The CC discussed whether this “fiction of delivery” should be treated as an action that extends the deadline for the tax assessment by another year, when less than 12 months remain until the expiration of the tax assessment deadline. The authors of CC in their contribution lean towards the opinion that delivery by fiction should not extend deadline for the tax assessment by another year, because it is not certain that the taxpayer was aware of the content of the decision in the case of delivery by fiction. Therefore, it should not be considered an action that constitutes "notification of the decision on tax assessment" within the meaning of the Tax Code. According to the authors, filing the payment order in the file should not affect the tax assessment period. Furthermore, the authors believe that sufficient time space for finding correctly determined and assessed tax is already created by extending the deadline for the tax assessment based on the filing of an additional return.

However, the General Financial Directorate (GFD) disagrees. GFD argues that the fiction of delivery is legally valid and does not require the taxpayer to be materially aware of the document. As such, it qualifies as a proper delivery of notification and extends the assessment period by another year if less than 12 months remain until the tax assessment period expires.

In practice, this may mean that if a taxpayer files an additional tax return at the end of the deadline for the tax assessment, the deadline could be extended not by one year but by two years. When the deadline is extended by one year based on the submission of the additional return, and subsequently, by another year based on delivery of payment order by fiction.

KOOV 623/11.12.24

Authors:

Barbora Kšírlová, Senior Consultant, Tax Department

Eliška Stránská, Tax Department Manager