A fine for a mistake in your birth number? The Supreme Administrative Court annulled the fine of the tax office

Incorrect birth number on your tax return? The Supreme Administrative Court ruled in its recent judgment (Case No. 7 Afs 136/2024 - 36) that the fine was illegal.

The Supreme Administrative Court recently resolved a dispute between a taxpayer and the tax office concerning the filling in of a birth number in an electronic tax return. The tax office fined the taxpayer CZK 1,000 for filling in ten zeros in the box for the child's birth number. However, the Supreme Administrative Court ruled that a fine cannot be imposed in such a case.

What exactly happened? Take a look at the details of the case

The taxpayer filed his personal income tax return for 2020 electronically in XML format. When claiming tax benefits for dependent children, he entered ten zeros in the "birth number" field instead of the actual data. The tax office assessed this error as a defect in the filing structure and asked the taxpayer to correct it. When he failed to correct the error, it imposed a penalty.

The taxpayer defended himself in court, arguing that there was no error in the structure of the submission, but only in the content. The Regional Court found in his favour and annulled the decision of the tax office. However, the tax office lodged a cassation appeal with the Supreme Administrative Court.

Why was the fine illegal? Key conclusions of the court

The Supreme Administrative Court confirmed that the filling in of ten zeros was not a defect of structure, but only a defect of content. The structure relates to the correct arrangement of the data and the format - for example, that the birth number must have ten digits. The applicant complied with this. The fact that the number filled in did not correspond to any actual person was a defect in the data itself, not in the format of the submission.

The court emphasized that the IRS can only penalize errors that the law specifically allows it to penalize. An instruction of the General Directorate of Finance, which sets out the format of XML files, is not a legal regulation and therefore cannot impose new obligations on taxpayers.

Another important conclusion of the court was that a penalty cannot be imposed for an error in content, such as an invalid birth number, because such an error is not a defect in the structure or format of the submission.

Why is this decision important and what does it mean for you? A judgment that changes practice

This judgment protects taxpayers from disproportionate penalties for formal errors in the content of tax returns. It draws a clear line between the structure of the return (i.e. the technical requirements of the form) and the content of the return (i.e. the accuracy of the information filled in).

The decision also points out that the use of the EPO application for processing the tax return is not mandatory.

The decision also recalls that administrative penalties must be directly based on the law and that internal instructions of the tax administration cannot extend the obligations of taxpayers.

Are you unsure about the correct completion of your tax return?

Don't be caught off guard by a penalty for a formal error. Contact us to make sure your tax return is in order.