Summer of Grace extends to tax foreclosures

People who are owed money by the authorities, for example, for taxes or social security or health insurance arrears, through administrative proceedings rather than through a bailiff, will see their equivalent of a grace summer next year. They will be able to pay off their executions under a preferential regime.

“Several laws, such as the tax code, need to be amended. These foreclosures could not be included in the grace summer, which will start this year in September,” said Marek Výborný, chairman of the KDU-ČSL parliamentary club. He is one of the initiators of the grace summer.

“It is valid for the ruling coalition that, at the moment, they will connect three key ministries, that is, finance, justice, and labor and social affairs, and prepare the text of the amendment, which we would discuss and approve ideally during the autumn,” he added, adding that it is not yet clear whether the amendments will take effect in January or next spring.

Therefore, other details, such as the amount of the lump sum that debtors will have to pay for the execution costs, are not explicitly known. Tax execution is designed to recover tax arrears and penalties arising from tax proceedings. The creditor and the enforcer in these cases is the tax office.

Administrative enforcement is managed by an executive authority, such as a municipal or regional authority, which enforces the obligation imposed on the debtor in administrative proceedings.

According to roughly year-old estimates, forgiveness in tax and administrative foreclosures could involve about 900,000 cases. Výborny said the authors of mercy summer are aware that people in these foreclosures are disadvantaged relative to those against whom the state and other public entities pursue proceedings through bailiffs.

Only the principal and the fee are paid

The mercy summer, which took place at the turn of the year and is to be repeated this September-November, applies to enforcement proceedings conducted by bailiffs. In addition to debts to the state, regional or municipal authorities, it also applies to companies with state participation, such as health insurance companies, ČEZ, or transport companies.

Under the scheme, people can get rid of several foreclosures under more favorable conditions. They have to pay the necessary amount due, the so-called principal, and CZK 1,815, including value-added tax as a fee to the bailiff between September and November. The remainder of the amount they have recovered will be forgiven.