Notification obligation in relation to the exempted revenues of a value higher than 5 000 000 CZK

The personal income taxpayers are newly required to report to the appropriate financial authorities any exempted revenues of a value higher than 5 000 000 CZK. The revenues have to be reported by 31. 3. 2016.

Therefore, if anyone has received a revenue in the 2015 tax year from, e.g. an auction of an art piece, with a value higher than 5 000 000 CZK, that person is obligated to file the report mentioned above with the appropriate Tax Office. The value limit is considered for each individual revenue separately.

This obligation does not extend to the revenues which the financial authority can find out about through the Cadastre of Real Estate of the Czech Republic (typically revenues from the real estate trade).

The report must contain the value of the revenue, brief description of the origin of the revenue and the date on which the revenue was acquired (Section 38v of the Act No. 586/1992 Coll.).

Failure to fulfil these obligations by the deadline to file annual tax returns may result in a fine to the taxpayer of (Section 38w of the Act No. 586/1992 Coll.):

• 0,1 % of the value of the unreported revenue, when the obligation has been fulfilled without a prior notice,
• 10 % of the value of the unreported revenue, when the taxpayer has met the obligation within the additional period allowed to the taxpayer in a notice from the financial authority, or
• 15 % of the value of the unreported revenue, when the taxpayer has failed to fulfil the obligation after the additional period.