Taxes
20 November 2019

The amendment to the Tax Code introduces a tax execution by suspension of a driving license

The amendment to the Tax Administration Act (Tax Code) was published in the Collection of Laws. The amendment modifies for example the provisions on representation based on power of attorney, the provisions on the obligation of taxpayers to report bank account numbers and introduces a new way of recovering tax arrears. Effective from 1 January 2021 provisions on ex-offo registration and publication of the list of taxpayers registered for income tax are also introduced.

Marianna Dávidová

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The main objective of the amendment is to reduce the administrative burden on taxpayers and make certain legal provisions more effective. The amendment modifies inter alia the following provisions:

  1. Representation based on power of attorney – In practice there are often situations, where a taxpayer submits several powers of attorneys, the scope of which overlaps each other. According to the approved amendment to the Tax Code, the most recent power of attorney will always replace the previous one, to the extent they overlap. In case of any doubt the tax authorities may require the taxpayer to resolve any discrepancies that arise.
  2. Suspension of a driving license – in order to maintain effective collection of taxes and proper fulfillment of tax obligations, a new type of tax execution is introduced – tax execution by suspension of the driving license. Should the tax execution be performed this way, the tax debtor is indirectly forced to fulfill its obligation in order to get back the driving license. This tax execution method cannot be used in case of professional drivers.
  3. Reporting of a bank account number – the registration procedure provisions abolish the obligation for individuals and businesses to report bank account number, as this is reported to the tax authorities by the payment services provider himself.
  4. Ex-offo registration – effective from 1st of January 2021, the registration procedure is modified so that the taxpayers registered in the register of legal entities, entrepreneurs and public authorities are not obliged to register with the tax authorities, but the respective tax authorities register them ex-offo, within 30 days following their publication in one of the mentioned registers. A taxpayer that is not registered in such a register, shall be registered by the tax authorities based on a tax return filled after 31st of December 2020. The tax authorities will issue the registration decision with the assigned tax ID and a personal account number of the taxpayer. At the same time, taxpayers are no longer obliged to notify the tax authorities about the changes of their personal information, if they fulfill such an obligation towards another institution, that reports them to the tax authorities.

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