A corporation may choose either a calendar year or an accounting year as its tax year for CIT purposes.
CIT returns must be filed within three months of the end of the tax period. If filed electronically, the deadline is postponed by one calendar month (example: if the company is not subject to a mandatory accounting audit and has the calendar year as its CIT period, then the standard deadline for filing of the CIT return is 1 April of the following year, or 1 May of the following year if the CIT return is filed electronically).
If the CIT tax return of the taxpayer is prepared and filed by a registered tax advisor, or if the taxpayer is subject to a mandatory accounting audit, the CIT return filing deadline is extended to six months after the end of the tax period (example: if a company which is subject to a mandatory accounting audit has the calendar year as its CIT period, then the deadline for filing of the CIT return is 1 July of the following year).
In some special cases, a filing deadline of less than three months may apply (e.g. upon merger or liquidation). This shorter deadline may, however, be extended if approved by the tax office.
Payment of tax
Tax payments are due on the same day as the filing deadline.
A company is obligated to make CIT advances based on its last known tax liability. The tax advances are paid semi-annually or quarterly, depending on the amount of the last known tax liability.
Upon filing a tax return, tax advances paid during the year for which the tax return is filed will offset the tax liability declared in the tax return. Any outstanding amount must be paid on the date the tax return is due. Any overpayment will be refunded upon request or may be credited against future tax liabilities.
Tax audit process
There is no statutory tax audit cycle. Entities are picked by the tax authorities based on selected criteria (e.g. tax loss position, huge marketing costs) or randomly.
Statute of limitations
The tax may be assessed within three years after the deadline for regular tax return filing. In certain cases (e.g. filing of supplementary tax return), such assessment period may be prolonged by one year, maximally up to ten years. If the company is in a tax loss position, the standard three-year period for tax assessment is extended by the period for which the carried-forward tax loss can be utilised in the future tax periods (i.e. it is extended by five years). Similar extension affect arises if the company utilises tax relief under the investment incentives.
Topics of focus for tax authorities
The tax authorities seem to focus on marketing costs, management fees, transfer pricing in intra-group relations, entities in a tax loss position, entities with tax investment incentives, and entities with an R&D allowance. More and more attention is drawn to the topic of tax law abuse.