What is it?

Instead of an inspection and penalties, a personal notification arrives (usually by data box or phone) asking: “Please check this.” The approach uses behavioural methods, inspired by similar European projects, for example in the UK and Belgium.

What is it trying to achieve?

The aim is to encourage voluntary tax compliance, reduce the administrative and time burden on taxpayers and authorities, and strengthen trust between the state and its citizens. 

What results has the project achieved in the Czech Republic?
  1. Phase (2024): pension savings
  • It targeted taxpayers who ended pension savings early, breached the conditions for tax deductions and failed to settle their tax obligations correctly in their returns.
  • 575 people were contacted, of whom 62% voluntarily filed an additional tax return.
  • The state budget received CZK 3.5 million out of an expected 4.5 million.
  1. Phase (February 2025): spouse tax credit
  • 3,502 people were contacted, 74% responded, and the budget received CZK 48.8 million. 

Together, the two phases reached almost 4,000 taxpayers and brought in CZK 52.3 million. The General Financial Directorate plans to analyse this project as a regular part of tax administration and expand it to other areas.

Final thoughts

In our view, Tax Echo is definitely a friendlier approach than launching a tax inspection, which can be very stressful in itself. Generally, it lets people correct an error without a penalty for the discovered mistake. Of course, additional returns and tax payments may give the tax office a right to late-payment interest. We encountered the first phase personally when one of our clients was contacted by phone. After correcting the return in cooperation with the tax-office officer, everything was resolved within two weeks. 

 

 

If you are unsure what to do or need help with your return, do not hesitate to contact us. Accounting can sometimes seem like an impenetrable jungle, but we will guide you through it safely. We will go through everything with you, explain it and make sure you are not left on your own. 🌿🦜