This year, individuals, sole traders, and companies grappling with tax and social security debts will have the opportunity to see their penalties and related charges wiped clean. The House of Commons gave its nod to a pair of government amendments in the final round of voting on Wednesday, paving the way for this unique opportunity. These bills will now proceed to the Senate.
“This is a one-time occurrence. Building upon the lessons from previous grace periods, we are extending this from July 1 to November 30. The entire debt must be paid in full. The grace period can be availed if the debt to the Czech Social Security Administration (CSSA) is settled by November 30. The benefit entails the forgiveness of interest on delayed payments, penalties, and other associated costs,” stated Marek Výborný, chairman of the People’s Party parliamentary group.
During the initial round of discussions in early April, Labour and Social Affairs Minister Marian Jurečka (KDU-ČSL) described this as a “helping hand from the state,” with the relief potentially affecting up to 715,000 individuals and 265,000 companies. The total amount forgiven, including penalties and related costs, is estimated to reach CZK 18 billion.
In essence, debtors will be required to settle their social security debt, while the state will forgive penalties and enforcement expenses. Debtors can apply electronically through the authority’s portal from July to November. After the debt is paid, CSSA will waive the debt itself.
This relief is applicable to debts incurred prior to September 30 of the previous year and does not cover newly incurred debts. Unlike previous grace periods, there will also be an option to pay off the debt in installments. Debts amounting to CZK 50,000 can be spread over twelve installments, while higher debts will be payable over sixty installments, spanning five years. However, the first installment must be submitted this year, with penalties not being forgiven if any installments are missed.
Additionally, the House of Commons also endorsed a related government amendment concerning the forgiveness of interest on tax arrears in its final deliberations.
Individuals who settle the principal amount between July and November and whose debt was incurred by the end of the previous September will qualify for the forgiveness of penalties and interest, provided they formally request it.
The amendment encompasses the forgiveness of court fees and local charges, such as those for waste disposal, graves, and dog licenses. The bill also allows for the waiver of trivial tax arrears incurred until the end of the previous September. This measure applies to individuals and businesses owing less than 200 crowns in taxes, interest, and penalties.
An exception is made for real estate tax, where the debt threshold is set at CZK 30, and the total arrears must not exceed CZK 1,000. According to the draft, the debt will be automatically cleared from July without the need for debtors to apply directly, with the state aiming to reduce administrative costs for these minor debts.
For amounts exceeding CZK 5,000, payments can be spread over four installments, with the first installment due by the end of November this year and the remaining three in the following year.
Both government amendments received unanimous support from MPs across all political factions, with no opposing votes. The bills will now proceed to the Senate for further consideration and then to the President of the Republic for signature.
Source: novinky.cz
