Investiční pobídky a lhůty

For recipients of investment incentives, the the tax assessment period differs from the standard regime. If a company receives a Decision of an investment incentive in the form of a tax relief, it may apply this relief for up to ten consecutive tax periods.

According to the Income Tax Act, the deadline for tax assessment for all tax periods in which the investment incentive can be utilized ends only together with the last tax period when the tax assessment period for its application expires or when another event occurs that terminates its utilization (e.g., merger or transfer of assets to related parties).

However, the Supreme Administrative Court has indicated in its case law that even in these instances, it is necessary to respect the objective ten-year tax assessment period according to Section 148, Paragraph 5 of the Tax Code.

A recent dispute resolved by the Supreme Administrative Court was also noteworthy, in which the taxpayer sought to shorten the tax assessment period while utilizing the investment incentive in connection with an amendment to the Income Tax Act. The Court confirmed that the wording of the law in effect at the time the promise of the investment incentive was issued is decisive for the length of the tax assessment period (more HERE).

For completeness, it should be noted that a taxpayer may inform the tax authority that they will no longer apply the tax relief in the following years. By submitting this notification, it is possible to achieve a shortening of the tax assessment period, which can be practical in cases where the relief has already been exhausted in the initial years of its utilization.

Authors:

Ladislava Zamazalová

Karolína Moškořová