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On 1 October this year, genuinely significant changes beneficial to taxpayers will take effect in the National Revenue Administration Act and the VAT Act. The amendment clarifies the existing rules on submitting returns and corrections and allows taxpayers to accept only some findings of a completed customs and tax inspection. These changes give businesses greater flexibility and reduce the risk of lengthy disputes with the authorities.
An original return can also be submitted after a customs and tax inspection begins…
A customs and tax inspection, meaning an inspection under the National Revenue Administration Act, is a procedure conducted by state authorities to examine various aspects of business activity.
In practice, this procedure is very often initiated because a business has failed to file a tax return on time. The previous imprecise wording left many businesses in this situation with their hands tied.
Some authorities argued that once a customs and tax inspection had begun, only a previously submitted return could be corrected. Ambiguous provisions were used to deny the right to submit an original return.
The amendment definitively rules out this interpretation and expressly grants the inspected party the right to submit a return or a correction within the scope of the inspection within 14 days of delivery of the authorisation to conduct the customs and tax inspection.
…and after delivery of the inspection findings. It will be possible to accept some of the irregularities!
The right to submit a return or a correction will also apply within 14 days of delivery of the inspection findings.
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Importantly, the amendment also introduces a new option: accepting only some of the irregularities identified in the inspection findings.
This was previously impossible, and after receiving the findings a business had to choose between:
- Accepting all findings of the customs and tax inspection and correcting all settlements;
- Forgoing a correction and waiting for the customs and tax inspection to turn into tax proceedings concerning the entire liability.
Allowing a return or correction covering some irregularities creates an opportunity for narrower tax proceedings, which can consequently be conducted more quickly and easily.
A lower additional VAT liability
The changes to the National Revenue Administration Act described above also affect the VAT Act. The amendment changes Article 112b(2a) of the VAT Act, which will read as follows from 1 October:
“If, in the case referred to in paragraph 1, the taxpayer has submitted a return or a corrected return in accordance with Article 62(4) of the Act of 16 November 2016 on the National Revenue Administration and, no later than the day that return or corrected return was submitted, has paid the tax liability or repaid the unduly received refund, the head of the customs and tax office shall determine an additional tax liability of up to 15% of the amount by which the tax liability was understated or the refund of the tax difference, refund of input tax or tax difference available to reduce output tax in subsequent settlement periods was overstated”.
This means reducing the risk associated with an additional VAT liability. The penalty may now amount to a maximum of 15%, rather than the previous 20%.
Tax inspections remain unchanged – will there be a similar amendment? What about the Fiscal Penal Code?
Finally, the rules described above apply exclusively to customs and tax inspections.
As its name indicates, the Act of 24 June 2025 amending the National Revenue Administration Act and the Value Added Tax Act concerns only those two legislative acts.
No similar changes have yet been introduced for tax inspections governed by the Tax Ordinance. This type of inspection may therefore soon start raising more questions…
There is also no amendment to the Fiscal Penal Code accommodating the changes discussed here. Such an amendment appears necessary because accepting some irregularities identified during a customs and tax inspection may affect the extent of fiscal criminal liability and its possible limitation under Article 16a of the Fiscal Penal Code, which currently says nothing about the effects of submitting a partial correction.
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Summary
Are you ready for inspections under the new rules? Remember that every inspection requires proper preparation and appropriate conduct throughout.
If you need support in this area, TaxCoach may be a good choice. We provide our clients with comprehensive accounting services and prepare businesses for every inspection.
Contact us today and we will prepare a personalised offer for you.
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