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Tax loss carryback

PwC Česká republika

At its Friday meeting, the Czech Chamber of Deputies approved a crisis-relief  tax package which, within the framework of personal and corporate income tax, introduces the possibility of applying a loss carryback for the period ending 30 June 2020. The taxpayer will now be able to deduct from the tax base a tax loss or a part thereof for even two periods immediately preceding the period for which the tax loss is assessed, in the aggregate amount of CZK 30 million. To apply for the tax loss carryback, the taxpayer will have to file an additional tax return for the relevant previous periods. This mechanism will mean that the tax paid in the past, after the application of the tax loss carryback, will lead to an overpayment of income tax which the taxpayer will be able to claim.

At the same time, the proposed amendment to the law introduces a special rule for the period ending 30 June 2020 or later, thanks to which the taxpayer will be able to claim back the tax loss he expects in this particular period before the deadline of filing, based on the taxpayer’s own estimate. However, this expected tax loss can only be claimed in one immediately preceding period. However, if the subsequently reported tax loss is lower than the estimate, the taxpayer will be obliged to file an additional tax return for the period in which he claimed a higher tax loss and to pay interest on arrears on any additional tax surcharge.***

Matěj Čaňo
PwC | Daňové a právní služby