Corrective vs Supplementary Tax Returns: Deadlines, Penalties and 2025/26 Changes

24.4.2026 | ARROWS law firm

Have you discovered an error in your tax return or accounting records? There is no need to panic—there is a solution, but only if you act in time and correctly. This article will guide you through the difference between a corrective and an additional tax return, explain the deadlines that can reduce or increase the penalties you may face, and highlight the rules that changed with effect in 2025/2026.

The illustrative image shows an expert providing a consultation regarding corrective and additional tax returns.

Difference between a corrective and a supplementary tax return
How penalties differ depending on the type of return
Deadlines for filing a supplementary tax return
Difference between errors in accounting and in a tax return
New rules for waiving penalties (changes from 2026)
Practical steps when an error is discovered

Key takeaways

Timeliness is key: an error discovered within the filing deadline requires a corrective tax return with no penalties; after the deadline, late-payment interest applies and, if the tax is assessed by the tax authority, a penalty may also be imposed
Difference in procedure: a corrective return replaces the original filing and does not result in fines; a supplementary return is filed later and almost always has financial consequences
New scope for waiver: from July 2025, the tax authority may waive up to 100% of penalties and fines if a justifiable reason for the delay is demonstrated (previously only up to 75%)
Tax audit as a risk: if an error is found during an audit and you do not voluntarily disclose it, you face a 20% penalty on the additionally assessed tax on top of late-payment interest

Difference between a corrective and a supplementary tax return

It may seem that both terms mean the same thing—correcting an error. In reality, they do not. This distinction determines whether the error can be resolved without consequences or whether it may cost you tens of thousands of Czech crowns.

A corrective tax return is filed if you discover an error while you are still within the statutory deadline for filing the return. For the 2025 tax return, this means no later than 1 April 2026 in paper form, 4 May 2026 electronically, or 1 July 2026 if your return is prepared by a tax advisor or an attorney.

The key advantage is that this correction is not penalized. The tax office treats it as part of the standard tax process and imposes no fines or late-payment interest.

A supplementary tax return is filed if the error is discovered after the deadline for the regular filing has passed. If the tax increases, you must file the supplementary return by the end of the month following the month in which you became aware of the error. If you are required to file by 1 April and you discover the error on 15 November, you have until 31 December of that year to file the supplementary return.

However, the situation becomes considerably more complicated here. In practice, it is worth consulting the specific impacts and procedure with experts in tax law, especially if late-payment interest or penalties may apply. If the tax has increased, you face late-payment interest and, in some cases, a penalty. If the tax has decreased, you are not obliged to file a supplementary return, but you are entitled to do so—and this is where numerous technical rules and exceptions come into play, which our Czech legal team deals with in practice on a regular basis.

How penalties differ depending on the type of return

Penalties—financial sanctions—are what hurt entrepreneurs most when mistakes happen. And this is precisely where timeliness has a decisive impact.

Corrective return: no penalties

If you file a corrective return on time, virtually nothing bad will happen. You will not face fines for late filing, penalties on additionally assessed tax, or late-payment interest. The law provides this option specifically so that minor errors can be corrected in time without fear of sanctions.

This is the strongest argument for carefully verifying your tax return before the deadline expires. It is not just a formality—it can mean a difference of tens of thousands of Czech crowns. In typical situations such as loans between a company and its owner, even a small setup error can result in additional assessments and related sanctions.

Supplementary return: interest and potentially a penalty

When you file a supplementary tax return after it is found that the tax should have been higher, you must pay:

The tax difference itself – the amount you originally omitted or calculated incorrectly.
Late-payment interest – calculated for each day from the original tax due date until the day the tax office receives the payment.

Late-payment interest changes during the year. Its amount is always calculated based on the Czech National Bank repo rate increased by 8 percentage points, and it changes twice a year—on 1 January and 1 July. If, for example, the interest rate this year were 15% per annum, for 100 days of delay on an amount of CZK 100,000 you would pay approximately CZK 4,110 in interest alone.

If the tax increased and you voluntarily disclose it by filing a supplementary return, you will not face a penalty. However, if the situation is related to suspected intentional misrepresentation or concealment of information, it is also appropriate to address the matter from the perspective of criminal law. A penalty of 20% of the additionally assessed tax applies only if the tax office discovers the error and assesses the tax during a tax audit. This means that, for the same CZK 100,000, in addition to the tax and late-payment interest, you would also have to pay another CZK 20,000 as a penalty.

The difference is substantial: while in the “voluntary” supplementary-return scenario you pay only the tax and late-payment interest, if the tax is assessed by the tax authority you pay the tax, interest, and a 20% penalty.

If the tax decreased

If a supplementary tax return results in a reduction of tax (e.g., you forgot to claim a deduction or tax credit), no penalty or fines are typically imposed. You are entitled to file it, but a deadline applies here as well—you must do so by the end of the month following the month in which you discovered the error, and you must also be within the limitation period for assessing tax (usually 3 years, and in some cases up to 10 years). The overpaid tax should then be refunded to you.

Deadlines for filing a supplementary tax return

Deadlines are a legal tool designed to provide certainty for everyone. Once the limitation period for assessing tax expires, additional tax can no longer be assessed. But as soon as you become aware of an error, you have a precisely defined time to correct it.

Basic deadline: if you discover an error and the tax should have been higher, you must file a supplementary tax return by the end of the month following the month in which you discovered the error.

Example: you file your 2025 tax return by 1 April 2026. If you notice on 15 November 2026 that you forgot to include income, you must file a supplementary return by 31 December 2026.

Limitation period for assessing tax: generally, it is 3 years from the due date of the regular tax return. In certain cases (e.g., a tax loss, suspicion of tax fraud), this period may be extended up to 10 years.

This means that if, for example, the tax return was due on 1 April 2026, you can correct it by filing an additional return until 1 April 2029 – and even after a year and a half you still have the right to file an additional return without the limitation period having expired.

These deadlines sound simple, but in practice the question is when the error was “discovered”, when everything was communicated “sufficiently”, or whether an exception applies to you. That is why our Prague-based legal advisors consistently monitor their clients’ individual tax proceedings to ensure deadlines do not lapse.

The difference between errors in accounting and in a tax return

You are allowed to correct errors if you are diligent with your accounting. However, many entrepreneurs do not realise that there is a difference between an error in accounting and an error in a tax return – and both issues must be handled differently.

Errors in accounting

An accounting error means you posted something incorrectly – for example, you recorded a lower invoice amount, posted it to the wrong month, or did not record the transaction at all. Accounting is kept precisely for this purpose – so that errors can be identified and corrected retrospectively.

If you discover an error before the financial statements are approved, you can correct it easily – you reopen the books and make a correcting entry. Everything remains legible and traceable, as required by the regulations. Procedures for correcting errors in accounting are governed by Act No. 563/1991 Coll., on Accounting.

If you notice the error only after the statements have been approved, the procedure is more complex – you must make the corrections in the following accounting period and describe them in the notes to the financial statements.

Errors in a tax return

An error in a tax return means you transferred the data from your accounting incorrectly, or calculated it incorrectly. For example, you reported lower revenues than you should have, or you did not claim a deduction even though you were entitled to. Or you forgot to include rental income even though it should have been taxable.

This is the key point: an error in a tax return is not addressed by “correcting” it directly in the return. It is addressed by filing a new return – either a corrective return (if you are still within the deadline) or an additional return (if the deadline has already passed). Each return is a separate legal statement, and if you state incorrect data, you cannot simply “delete” it later.

This is the key mindset shift: you can “correct” your accounting routinely, but you can correct a tax return only within precisely defined deadlines and procedures. That is why it is so important to check the return properly before submitting it.

The link between errors in accounting and in a tax return

If you correct an accounting error after the financial statements have been approved (and therefore after the tax return has been filed), this does not necessarily mean that an additional tax return can automatically be filed. You must verify whether the error had an impact on the tax.

Practical example: you found that you posted an invoice to expenses in February even though it was actually in January. This is an accounting error – but if the tax is calculated on the entire year as a whole, it may not affect the annual tax liability. By contrast: you found that you did not claim a VAT deduction that should have been included. That affects the tax and requires an additional tax return.

Our Prague-based legal advisors will help you assess these impacts correctly – because this is exactly where the risk lies that you will deal with the matter too quickly or too late.

New rules for remission of penalties (changes from 2026)

As of 1 July 2025, a very important resolution came into effect – expanding the options for having penalties and fines for tax delays remitted. This is crucial for any entrepreneur who has already made a mistake.

Previously, the tax administrator could remit a maximum of 75% of penalties and fines if you demonstrated a “justifiable reason” for the delay – e.g., health issues, particularly difficult personal circumstances, or an unexpected legal change that you could not have anticipated.

From July 2025, up to 100% of penalties and fines can be remitted, if the reason is truly serious and justifiable. When assessing your application, the tax administrator reviews three basic criteria:

A justifiable reason for the delay – e.g., illness, death in the family, serious personal reasons.
The economic or social circumstances of the taxpayer – whether paying the fines and penalties would constitute an unmanageable financial burden.
Frequency of breaches of obligations – if you are an honest taxpayer and this is your first mistake, you have a better chance.

The application for remission is filed with the tax administrator on a form – and our Prague-based legal advisors can prepare it for you and support it with a detailed explanation and evidence that truly carries weight.

In practice, this means: even if you overlooked something and a penalty is looming, you do not have to give up. There is a chance you can reach an agreement with the tax administrator – but only if you act proactively and factually, without unnecessary excuses.

Tax audit and what changes if the tax office identifies the error itself

The worst-case scenario is when you do not discover the error yourself, but the tax office does during a routine tax audit. This is where the rules change and the penalties are significantly stricter.

How the tax administrator initiates an audit

A tax audit is initiated by service of a notice of commencement of a tax audit, which defines the scope and subject matter of the audit. The tax administrator has the right to review documents that are no more than three years old. In some cases (e.g., where tax fraud is suspected), the time limit for assessing tax is extended up to 10 years.

Once the notice arrives, you know something has gone wrong—and now procedures start that are no longer taxpayer-friendly. Put simply, if you do not “produce evidence,” everything is against you.

Proposed payments in the event of an audit

If the tax administrator finds during the audit that the tax was calculated incorrectly, you will receive an assessment stating the amount you must pay. This amount includes:

The additional assessed tax difference itself.
Late payment interest—for each day from the original due date.
A penalty of 20% of the additionally assessed tax.

This means that if an underpayment of tax of CZK 100,000 is identified, you will pay CZK 100,000 in tax, a few thousand crowns in interest (depending on how long it dragged on), and another CZK 20,000 as a penalty—i.e., approximately CZK 120,000 and more.

This is not a negligible amount. And this is exactly where it matters whether the error is uncovered early in the audit or only at the end, because interest is calculated for the entire period of delay.

Rights of the taxpayer during an audit

You are not defenseless in the proceedings. You have the right to:

Be notified in due time of the commencement of the audit.
Know what the audit is focused on.
Submit evidence that refutes the authority’s doubts.
Ask questions and request explanations.
File a complaint if the process appears unlawful to you.

Our Prague-based attorneys can represent you during a tax audit—i.e., be present at meetings, analyse the authority’s requests, prepare your defence, and negotiate with officials on your behalf. It is not common practice for a taxpayer to “argue” with the tax office alone—in many cases, legal representation leads to significantly better outcomes.

Possible issues	How ARROWS helps (office@arws.cz)
You have discovered an error, but you are not sure whether it must be addressed for tax purposes. It seems minor, but you do not know whether it has an impact.	ARROWS will carry out a legal analysis of your case and determine whether it is truly necessary to file an additional tax return or whether it is a standard accounting correction with no tax consequences.
You are facing a 20% penalty and late payment interest. You have already been audited and the tax administrator has assessed an amount that you absolutely cannot pay in one lump sum.	ARROWS will try to obtain a waiver of penalties for you—preparing a high-quality, well-reasoned application that has a real chance of success under the rules effective from July 2025. At the same time, we will discuss instalment options or an appeal with you.
The tax office has initiated a tax audit and is requesting documents you do not have organised or are unsure about.	ARROWS represents you during the audit, analyses the authority’s requests, prepares supporting materials, and negotiates on your behalf. This reduces the risk of mistakes in your response and strengthens your negotiating position.
You do not know the deadline for filing an additional tax return. Time is running and you are afraid you might already be too late.	ARROWS will clearly tell you by when you must act and will ensure the return is filed on time. In addition, we handle all administrative details and communication with the tax office.
You have a combination of errors: an accounting error + a tax filing + at the same time an audit is ongoing for value added tax (VAT).	ARROWS takes a comprehensive view and ensures that all components are handled in a coordinated manner and without the risk that resolving one error creates a new problem elsewhere.

Practical steps after discovering an error

If you act logically and quickly, you can significantly make your life easier and protect your money.

Step 1: Immediate verification of the deadline

As soon as you notice the error, determine the exact date, when you became aware of it. This is crucial—this is what places you in the “timely” or “late” correction category. If it is still within the deadline for filing the regular tax return (this year until 4 May 2026 electronically), you have room to file a corrective return without penalties. If the deadline has already passed, you must expect an additional return and potential penalties.

Step 2: Consultation with an expert

It would not be best to handle the matter on your own. Our attorneys in Prague and tax advisers will help you:

Assess whether the error truly needs to be addressed for tax purposes, or whether it is purely an accounting matter.
Calculate precisely what tax consequences it will have.
Determine what penalties you face—and whether they can be minimised.
Prepare the return flawlessly.

A consultation takes an hour and will save you weeks of stress and potentially tens of thousands in fines.

Step 3: Preparing the return

A corrective or additional tax return is filed on the same form as the regular return. The only difference is a tick box in the header where you indicate what type of return it is. In the case of an additional return, you must also complete a special section where you calculate the difference between the original and the newly determined tax liability.

You do not enter new data there as you would in a regular return—you state the full amounts and then verify them in the “changes” section. If you do this incorrectly, the authority may treat your attempt to remedy the issue as defective and the matter will become even more complicated for you.

Step 4: Filing and communication with the authority

Make sure the return is delivered on time. If it is to be filed electronically, submit it before the set deadline—never at the last minute. Keep the confirmation of receipt.

If you file a supplementary tax return (i.e., you are admitting to a higher tax liability), expect the tax authority to start communicating with you—either to verify the information or to confirm that it has accepted the return. Communicate proactively—never ignore letters from the Czech tax authority.

Step 5: Payment and monitoring deadlines

If the newly assessed tax (the difference) must be paid, pay it as soon as possible. The sooner you pay, the less late-payment interest you will accrue. Every day counts.

If you have questions or are unsure whether everything is correct, contact our Prague-based law firm (office@arws.cz)—don’t hesitate; it’s better to ask once too many times than once too few.

Final summary

Discovering an error in a tax return or accounting does not have to mean a financial disaster if you react in time. The key is the difference between a corrective return, which protects you from penalties within the standard deadline, and a supplementary return with late-payment interest. However, a quick and voluntary solution is always the cheapest option.

If the Czech tax authority discovers the error only during an audit, in addition to interest you will also face a strict 20% penalty on the additionally assessed tax. However, from July 2025 you can defend yourself more effectively. If you can prove a serious and justifiable reason, the tax administrator now has the power to waive up to 100% of penalties and fines.

However, tax calculations and communication with authorities are often full of bureaucratic traps. The attorneys at ARROWS will help you through the entire process and, if necessary, prepare a watertight application for a waiver of sanctions. Email us at office@arws.cz and entrust the matter to professionals who, for your complete peace of mind, are insured up to CZK 400 million.

FAQ – Most common questions about a supplementary tax return

1. Do I have to have a supplementary tax return prepared by a tax adviser, or can I do it myself?
You can do it yourself—the form is public and the completion instructions are available on the Financial Administration’s website. However, we warn you: a lot of mistakes happen precisely in the “changes” section and when calculating the difference. If you make an error, it may mean the mistake is not actually corrected at all—and you think you have resolved it, while the Czech tax authority sees it differently. Our legal advisers usually take care of this—it is part of our standard advisory services.

2. If I file a supplementary tax return, will the tax authority automatically know about it, or do I have to report it myself?
When you file a supplementary return, the Czech tax authority automatically knows about it—it is an official document that is delivered into their information system. You do not need to report anything. However, we recommend keeping the proof of delivery—evidence that you filed it on time.

3. Am I at risk of criminal liability if I have only noticed the mistake now?
Criminal liability arises only if you knowingly and intentionally understated tax—i.e., you knew there was an error and quietly ignored it. If you overlooked the mistake and are now correcting it voluntarily, in principle nothing terrible should happen. However, legal assessment can sometimes be nuanced—it is good to have a lawyer’s support so they can provide an opinion on this point in case an audit comes later.

4. What is the “last known tax liability” and why is it required so strongly in a supplementary return?
The “last known tax liability” is the tax you last declared and that is recorded with the Czech tax authority. It is the amount from which your advance tax payments for the next year are determined. When you file a supplementary tax return, you must state it so that your future obligations are calculated correctly. If you state it incorrectly, errors arise in subsequent advance payments and the whole chain becomes more complicated. That is why our legal advisers always carefully verify this figure.

5. Can I file a supplementary tax return for a lower tax, even if it results in a tax loss?
Yes, you can—and the advantage is that, in principle, no penalty applies to a supplementary return for a lower tax. The state refunds the tax that is reduced—and you are entitled to a refund of the overpayment, or you can have it transferred to the next tax period. However, there are technical rules and deadlines—if you wait too long, the time limit may expire. It is better to ask our legal advisers to be sure.

6. Am I at risk of anything if the tax authority finds that I calculated a tax deduction incorrectly?
If you unintentionally calculated it incorrectly and are now correcting it, it should be fine—especially if you correct it voluntarily yourself. However, if the Czech tax authority finds that you intentionally claimed an unjustified entitlement in order to reduce tax, then it is worse—it may qualify as tax evasion with criminal consequences. That is why our legal advisers know how to document it properly so that no one can later suspect you of bad faith.

Notice: The information contained in this article is of a general informational nature only and serves for basic orientation in the matter under the legal framework as of 2026. Although we take maximum care to ensure the accuracy of the content, legal regulations and their interpretation evolve over time. We are ARROWS advokátní kancelář, an entity registered with the Czech Bar Association (our supervisory authority), and for maximum client security we are insured for professional liability with a limit of CZK 400,000,000. To verify the current wording of regulations and their application to your specific situation, it is necessary to contact ARROWS advokátní kancelář directly (office@arws.cz). We accept no liability for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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