Tax disputes are substantially different from other types of litigation. The fundamental difference is that the procedure for determining the tax and its recovery is established by the Tax Code and other tax laws.

While in civil proceedings two adversaries are armed with “equal arms”, in tax proceedings you are faced by the tax administrator (tax or customs office), who can decide on your duties in a superior manner. Your future thus rests in the hands of officials who, understandably, may be wrong.

Tax proceedings are divided into several parts, namely

1) finding managementwhich is aimed at the determination and determination of taxes; and

(2) Paying taxes, involving tax collection and tax enforcement.

You can also apply for protection of your rights in court, but in principle, except for a certain decision or intervention by the tax administrator in the framework of tax proceedings.

In a broader sense, the tax process also includes tax criminal law, the purpose of which is to prosecute offenses related to taxes. In particular, these are offences of withholding tax or non-payment of tax.

Finding Management

In tax proceedings, the obligation to ascertain and establish the tax is passed on to taxpayers, through the filing of tax returns, in which the data leading to the determination of the tax must be indicated. You must be able to substantiate the data indicated in the tax return. If the tax administrator has doubts that you have determined the tax correctly, he or she will initiate a procedure against you to remove the doubts and possibly also a tax inspection. In the event that the tax administrator has doubts that will not be eliminated, the tax will in principle be assessed in the form of payment assessment together with penalties in the form of interest for late payment, penalties for late tax claims or tax penalties.

At the tax inspection stage, we recommend that you exercise extreme caution in relation to the tax administrator and consult further with tax experts — tax advisers or lawyers specializing in tax law. An ill-considered procedure in relation to the tax administrator may close you the possibility of further defense.

It literally applies: “Anything you say can be used against you” - officials also use official records of a phone call. At the same time, it is not strategic to provide more information than is required of you. If you decide in good faith to refute doubts by providing extensive documentation, you run the risk that the tax authority will start to fall into other areas that it has not even examined before. Therefore, we recommend that you always insist on a written communication of requirements in more complex cases.

In connection with the correct determination of the tax, you may be charged penalty for late tax claimsif you do not file a tax return or file it late, or tax penalties, in the event that you are charged a higher tax, or the amount you have requested from the state is additionally reduced (deduction).

Paying taxes

It is usually expected that you will pay your tax obligations on time. However, if payment is not made on time, the tax administrator may proceed to tax enforcement. At the same time, the tax administrator may also charge you interest on arrears in the amount stipulated by law.

If the tax administrator considers that it is not possible to collect the tax from you, he may proceed to arrange payment of the tax, even though the tax has not yet become due. This is a very hard hit on existential certainties, which often requires prompt legal assistance.

Protection from the tax administrator's procedure

Careful building of a procedural strategy throughout the entire tax process is the essence of success:

1) Before the tax is assessed. It is necessary to use the means of protection even before the tax is formally assessed or settled, through timely and proactive communication with the tax administrator. Already during the procedure for eliminating doubts or tax inspection, it is advisable in more serious cases to contact a tax expert who will help you identify problem areas and set up communication with the tax administrator. If you do not respond to the tax administrator's doubts as part of the tax inspection and try to eliminate them, your chances of success will be significantly hampered.

2) After the assessment of the tax. When the tax administrator issues a payment assessment, it is already in place to fully apply the formal means of protection. The payment assessment may be appealed within the statutory period or challenged by other means of redress or supervisory measures, such as retrials or review proceedings. However, even these means of protection are decided by the financial or customs authorities.

3) Action against the decision of the administrative authority. Often the protection of the right cannot be obtained through these remedies and you only have to seek justice only in proceedings before the administrative courts, in the proceedings of an administrative action against the decision of the administrative authority. Proceedings in administrative justice are very different from classical civil proceedings — the defendant is the state here and his decision, typically a payment assessment, is challenged. However, the courts themselves cannot replace the tax administrator's decision in a binding manner, they can only annul it and return it for further consideration.

4) Cassation complaint. An unfavorable decision of the court in the administrative judiciary can be defended under the conditions established by law and within the time limit also by means of an extraordinary appeal - a cassation complaint. The cassation complaint is filed with the Supreme Administrative Court.

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Benjamin Franklin once said that there are only two certainties in life — taxes and death. Although humanity has been relatively successful in extending life expectancy, tax administration has become more efficient thanks to modern technology and the threat of taxes is becoming more and more definitive.