The Supreme Administrative Court (SAC) ruling on the deadline for filing a supplementary tax return for a lower tax

The deadline for filing an additional return

The right of a taxpayer to file a supplementary tax return for a lower tax is stipulated in Section 141 par. 2 of the Tax Code, which refers to the deadline for filing in the preceding paragraph of the same section. Section 141 par. 1 of the Tax Code sets out the obligation of a taxpayer to file a supplementary tax return for a higher tax, stating that this must be done by the end of the month following the month in which the taxpayer learns that the tax is to be higher than the last known tax. At the same time, this provision states that the obligation to file the supplementary tax return persists as long as the time limit for assessing the tax is running, which is the three-year period in which the tax authority can initiate a tax audit.

In the past, some panels of the SAC ruled in several instances that a supplementary tax return for a lower tax had to be filed by the end of the month following the month in which the taxpayer learns that the tax should be correctly lower than the last known tax. If this deadline was not met, the supplementary tax return was not admissible, and the tax authority was not obligated to assess a lower tax based on such a supplementary tax return. 

Current case before the extended panel of the SAC

The current case was assigned to a panel of the SAC, which did not consider the previous decisions of some other panels of the SAC to be correct. Therefore, the matter was referred to the so-called extended panel of the SAC, which is authorized to change the legal opinion held by the court on a specific issue.

The extended panel found enough arguments for changing the previous interpretation. Specifically, the extended panel concluded that the only deadline that applies to filing of a supplementary tax return for a lower tax is the time limit for assessing the tax. Therefore, the taxpayer may file a supplementary tax return for a lower tax as long as the time limit for assessing the tax has not expired, that is throughout the whole time when the tax authority can initiate a tax audit.

When filing a supplementary tax return for a lower tax, the taxpayer is not bound by the deadline of the end of the month following the month in which the taxpayer learns that the tax should be lower. The extended panel noted that if the tax overpayment resulting from the filing of the supplementary tax return is not subject to interest, the public budgets are not negatively affected by the taxpayer's delay in exercising the right to file the supplementary tax return for a lower tax.

For any questions regarding the filing of supplementary tax returns, feel free to contact our tax specialists.

Ruling: 2 Afs 363/2019

Author:

Pavla Vítková, Tax Manager