Q&A related to VAT

27.04.2020

The current situation related to the COVID-19 pandemic has raised many questions among taxable entities regarding the fulfilment of their tax obligations, including VAT. Therefore, we have decided to give you answers to questions frequently asked by our clients in relation to VAT.

Question: Are taxable entities required to submit their VAT returns, Recapitulative lists, EC Sales lists within the legal deadline given the current situation?

Answer:

There have been no measures issued by the government that would allow taxable entities to submit their VAT returns, Recapitulative lists, and EC Sales lists within a deadline other than the one stipulated by law. The deadline for the submission of VAT reports cannot be extended. In case a taxable entity does not submit its VAT return, Recapitulative list, and EC Sales list in time, we recommend you to request a remission in relation to the missed deadline. The Tax Authority is entitled to forgive the missed deadline only for the serious reasons (e.g. sick leave, hospitalization), while each request will be reviewed individually.

Question: What is the deadline for the submission of a request for remission of a missed deadline and how can the request be submitted?

Answer:

In case a taxable entity wishes to submit a request for remission of a missed deadline, it must do so no later than 30 days from the day when the reasons for incompliance ceased to exist provided that the entity fixes the incompliance within the same deadline (i.e. within 30 days from the date of late submission of VAT reports). Missing an already extended deadline and incompliance lasting one year from the last day of the original deadline will not be accepted by tax authorities. VAT payers can submit a request for remission of a missed deadline electronically by using a form entitled  „Všeobecné podanie pre finančnú správu “ (General Request for the Financial Administration) under „Správa daní“ (Tax Administration) once the VAT reports have been belatedly submitted.

Question: Is there an administration fee to be paid by a taxable entity upon the lodging of a request for remission of a missed deadline?

Answer:

Administration fees related to actions and proceedings taken by administration authorities which are subject to a charge will not have to be paid by taxable entities if these proceedings are carried out as a result of the coronavirus pandemic. However, it is necessary to justify the remission of fees in the request. 

Question: Are taxable entities obliged to pay their VAT liabilities within the legal deadline?

Answer:

Yes, the taxable entity is obliged to pay the VAT liability, which arose based on the submitted VAT return. Deadline for VAT liability payment specified in the VAT Act is maintained. If the taxpayer pays the tax liability late, the Tax Authority will impose a late payment interest.

If a VAT liability arises for a taxable entity and the deadline for the payment of VAT liability falls within the pandemic period, the amount due will not be considered as a sum in arrears, provided that the taxable entity pays or transfers the amount due by the end of the calendar month following the end of the pandemic. However, if the taxable entity does not pay the tax even within the new deadline, the amount due will be considered as a sum in arrears from the day following the end of this new deadline for payment. Unpaid tax liability will not be considered as a sum in arrears at the time of pandemic, but only for the purposes of recovery, i.e. it will not be recovered or reported as a sum in arrears (e.g. for the purposes of state aid). This does not apply for the purposes of imposing the late payment interest. 

Question: What if a taxable person submits a VAT return within the statutory deadline, however pays the VAT liability late?

Answer:

Deadline for the VAT liability payment is not extended. In the event of non-payment of the VAT liability within the statutory deadline, the Tax Authority will impose a late payment interest for each day of delay, starting on the day following the statutory deadline up to and including the date of payment. An annual interest rate of 15% is currently used for the calculation of the late payment interest.

Under certain conditions, the taxable entity has the right to request, among others, for permission to defer the payment of tax arrears or for the payment of tax arrears in instalments. In case of submitted application, the tax entity is also obliged to submit an analysis of its financial and economic situation.

During the period of permitted deferral of tax payment or payment of tax in instalments, the taxable entity shall pay interest on the amount of the tax deferral or on the amount of the permitted instalment, while the annual interest rate of 10% is currently used for the calculation of the interest.