Communication of the General Financial Directorate

Communication of the General Financial Directorate on tax pursuant to the Act on Renewable Resources

• The communication sets forth the obligations of the taxpayer and payer pursuant to Article I, point 2 and Article II, point 2 of Act No. 402/2010, Coll., amending Act No. 180/2005, Coll., on Supporting Electricity Production from Renewable Energy Resources (“Act on Renewable Resources”).
• The same rules apply to the taxpayer for the issuance of a document for the state purchasing price, the green bonus. The act does not stipulate any obligation to provide any further data and the obligation has been maintained to state the gross amount in the document, i.e. the amount prior to taxation.
• The payer withholds the tax pursuant to Section 7a et seq. of the Act on Renewable Resources. The base for the withholding is the amount without VAT stated in the taxpayer’s invoice in the relevant tax period, which is a calendar month. The payer shall subsequently decrease the taxpayer’s payment by the tax paid. The payer shall pay the tax within 25 days of the subsequent calendar month. Within the same deadline, the payer is obliged to file a tax statement (form of the Ministry No. 5537 – Sample No. 1) to the local tax administrator. The tax is rounded up to the nearest crown and the tax base as well as the tax itself must be determined separately for each individual document.
• The withdrawn tax constitutes a tax cost for the taxpayer keeping accounting books.

Instruction of the General Financial Directorate No. GFŘ-D-2 on the method of calculation of corporate income tax and compilation of tax returns for taxation period 2010 by taxpayers using the component depreciation method to depreciate their assets.

• The General Financial Directorate issued Instruction No. GFŘ-D-2 on 18 February 2011 to clarify doubts and unify the procedure to determine the tax for taxpayers who use the component depreciation method. Pursuant to the instruction, the operating result shown (line 10) is most frequently obtained from the profit and loss account and the differences between all accounting and tax depreciations shall be shown as a single amount on line 50 or, as the case may be, line 150 of the tax return. The taxpayer must document and prove the individual items forming the total amount.
• The instruction also stipulates the procedure for amounts relating to discarding of a component, acquisition of a new component and other items that the Income Tax Act considers as a tax deductible cost or, on the contrary, components and items that it does not consider as tax deductible costs. This amendment shall appear on line 40 or, as the case may be, line 160 of the tax return.
• During the taxation period or, as the case may be, the accounting period commenced in 2010, if a component was sold or inventories from discarded components were capitalized in the course of depreciation of assets as a whole, the income from such sale or revenues from the capitalization shall form a part of accounting revenues and shall thus be included in the operating result set out on line 10 of the tax return. Adjustments of this accounting procedure shall appear on lines 40, 50, 150 and 160 of the tax return.

The General Financial Directorate provided supplementing instructions to complete the form for the statement of income tax from employment income for 2010 and supplementing information on applications for tax bonuses.

• For instructions on how to complete selected columns and lines go to the website of the Czech Tax Administration Office: http://cds.mfcr.cz/cps/rde/xchg/cds/xsl/dane_poplatky_11776.html.

Changed deadline for filing tax returns and tax statements.

• In compliance with the general provisions of Section 33 of the Tax Rules, the calculation of deadlines was changed and is newly determined by weeks, months and years, where the period within which tax returns and tax statements must be filed commences on the day following the day that is decisive for the commencement of the period. Such periods have thus been extended by one day. For example, the last day of the above period for 2010 is 1 April 2011 or, as the case may be, 1 July 2011 for taxpayers, whose final accounts must be verified by an auditor or those whose tax returns are prepared and filed by a tax advisor. The tax is payable on the respective cited dates. Withholding income tax statements for 2010 must be filed by 1 May 2011 and statements of income tax from employment income for 2010 must be filed by 1 March 2011. The change does not apply to deadlines for filing value added tax returns or to statements filed electronically with the fixed deadline of 20 March 2011.