Czech Republic


Ground-breaking judgment of the Constitutional Court – VAT payers entitled to the refund of an undisputed part of excess VAT

In another ground-breaking judgment relating to taxation, the Constitutional Court has ruled in favour of VAT payers. The Constitutional Court has been more and more often considering disputes between VAT payers and tax authorities, where the tax authority has withheld the entire excess VAT while contesting only some performance and considering the other undisputed. In […]

Invitation to join us for a webinar: Brexit and the impact on VAT

With only a few weeks to go (effective date 29 March, 2019) and still no sign of an agreement between the United Kingdom (UK) and the European Union (EU), many tax authorities are gearing up for a hard Brexit. A “hard Brexit” means a number of things, but critically it means customs-controlled borders, which introduces […]

Do you finance your company using debt capital and deduct the financial costs from the corporate income tax base?

If so, we recommend acquainting yourself with the proposed amendment to the Income Taxes Act in sufficient time in advance. The amendment is currently before its second reading in the Czech Parliament’s Chamber of Deputies as the implementation of the European Anti-Tax-Avoidance Directive (as we informed you in our August newsletter) will bring a significant […]

Proposed amendment to the VAT Act – new rules for tax base corrections and VAT

In this newsletter you can learn about the proposed changes that will affect tax base corrections and VAT. The changes, which are to be brought by the draft amendment to Act No. 235/2004 Sb., on Value Added Tax (“VAT Act”), are expected to significantly affect all taxpayers wishing to issue a corrected invoice (tax document). […]

Have you published your financial statements in the Collection of Deeds?

If not, you face a risk of an administrative fine. Tax authorities have recently become more active in collecting the fine, as it does not require much effort. Do you know that the fine may be imposed not only by a commercial court but also by the tax authority? Companies are very well aware of […]

Transfer pricing audits – even tax authorities make mistakes

With increasing determination, tax authorities continue with their inspections of transfer pricing policies. Nevertheless, even they sometimes take unlawful steps we should all know about, either when preparing or later defending our transfer pricing rules. In one of its recent judgments, the Czech Supreme Administrative Court (“SAC”) stood up for a taxpayer and ruled that […]

New developments in payroll-related matters in 2018

Dear clients, We provide you with a brief overview of changes and new developments in payroll effective in 2018. Minimum wage increased The minimum monthly wage for full-time employment has been increased from the current CZK 11,000 to CZK 12,200 and the minimum hourly wage has been increased from CZK 66 to CZK 73.20. Maximum assessment basis […]

VAT as a part of the real estate acquisition tax base – continued

As presumed in our previous newsletter, the case of the village of Střelské Hoštice continues with a rather nice surprise. This time, however, the surprise came from the tax administration itself. The tax administration published a new press release on 24 November 2011 in which it significantly expanded on its original statement of September 2017. More […]

Is VAT included in the real estate acquisition tax base?

The principle of the benefit of the doubt has helped many taxpayers to save on tax. However, the taxpayer must usually enforce the principle by legal action. This was the case of the village of Střelské Hoštice that has recently attracted much media attention. What was it about and what effects does it have on […]

Combating tax ‘optimisation’ – Implementation of the ATA Directive (EU, CR)

Another tool used by the Czech tax administration to combat tax evasion is the ongoing implementation of the ATA Directive (Council Directive (EU) 2016/1164 laying down rules against tax avoidance practices) that is to be completed by 31 December 2018. Primarily, the Directive lays down new rules for the tax-deductibility of interest expenses. The rules are […]