Jaké novinky přinesl květen v oblasti smluv zamezujících dvojímu zdanění? Co je nového ve světě převodních cen? Čeho se budou týkat plánovaní daňové reformy v Maďarsku a Litvě? Tyto a další zajímavé informace se dozvíte v tomto článku.
On 14 May, a double taxation treaty was signed between the Czech Republic and Tanzania. A legislative process will now follow in both countries to allow the treaty to enter into force.
The Czech Republic has also agreed on the wording of the agreement with Oman. As the wording of the treaty contains provisions reflecting the expected Omani legislation in the area of personal income tax, which is not yet legislatively adopted, the subsequent legislative processes relating to this treaty will be initiated in both countries only after the adoption of this legislation.
The government of the Czech Republic also approved the wording of the agreement with Kenya, which we informed you about in February this yearhttps://www.dreport.cz/blog/kratce-z-mezinarodniho-zdaneni-leden-2025/.
Update of OECD transfer pricing country profiles
The OECD has published updated country profiles in the area of transfer pricing, which now cover a total of 78 jurisdictions. The newly updated profiles include, among others, Slovakia.
The profiles provide a basic overview of domestic legislation in key areas of transfer pricing, such as an overview of documentation obligations and deadlines. Newly added sections also cover the approach to so-called hard-to-value intangibles and the simplified regime for marketing and distribution activities (known as Amount B), which forms part of the OECD’s Two-Pillar solution.
The profiles are compiled directly on the basis of information provided by individual countries. The OECD plans to update it further in the second half of 2025.
OECD draws attention to common errors in country-by-country reports (CbCR)
The OECD has published an updated overview of the most common mistakes companies make when preparing country-by-country reports (CbCR).
Although the main purpose of the CbCR remains the assessment of transfer pricing of multinational groups, the importance of these reports continues to grow – especially because the CbCR also serves as a basis for the application of temporary simplification rules (the so-called transitional safe harbours) under the OECD Global Minimum Taxation Rules (Pillar II). The accuracy of the reported data is therefore crucial.
In the Czech context, the new recommendations apply only to a limited number of companies – specifically those that are obliged to actually compile and submit a report on behalf of a multinational group. The document does not have a direct impact on most Czech member companies that only submit a notification.
The updated guidelines build on the original version from November 2019 and now include a list of 28 typical errors. The most common include missing or incorrectly stated tax identification number (TIN), incorrect reporting of taxes due or paid, and incorrect identification of constituent entities in individual parts of the report.
Hungarian government proposes comprehensive changes to tax laws
The Hungarian parliament will soon discuss the government’s proposal for comprehensive changes to tax laws. In the area of corporate taxation, the changes are to concern the support of science and research by increasing the limit for deducting costs incurred in cooperation with public institutions (from the original HUF 50 million to HUF 150 million). In the area of personal income tax, the changes are intended to target support for families with children.
On the other hand, extraordinary profits of financial institutions are to continue to be subject to higher taxation in 2026 – compared to 2025, the rate will be increased from 7% to 8% for the tax base of up to HUF 20 billion and from 18% to 20% for the part of the tax base above this threshold. Partial changes are also planned in the area of VAT, excise duty, tax administration and accounting (for example, in the area of consolidation and rules related to global minimum taxation).
Lithuania aims to raise tax rates as part of government tax reform
Another European country that plans to make a fundamental change to tax regulations is Lithuania.
The main measures include the introduction of a progressive personal income tax system with new threshold rates of 20%, 25% and 32%, which will apply to income from employment and business. Lower rates (5% and 15%) will be applied to selected types of income, such as profit shares, income from long-term holding of capital assets and life insurance benefits.
For corporate income tax, the rate has been increased from 15% to 17%, the possibility of carrying forward a tax loss within a group has been reduced and new tax deductions have been introduced to support research and education. In the area of real estate tax, the introduction of progressive taxation, a specific tax on abandoned or neglected buildings and relief for families with children are planned.
VAT rates are also changing – accommodation and transport will now be subject to a 12% rate, and books will be subject to a 5% rate. Excise duties are also increasing, especially on sweetened drinks.
The above changes are uniformly scheduled to take effect on 1 January 2026.
The Netherlands and Germany have committed to work together to develop common rules on cross-border work
In the context of the signing of the protocol to the double taxation treaty, Germany and the Netherlands committed to further bilateral discussions and cooperation on rules for cross-border workers, especially in cases where cross-border work does not result in the creation of a permanent establishment. As part of the signed protocol, a rule was included in the double taxation treaty, according to which employees will be able to work in the other contracting state for up to 34 days in a calendar year without having to tax their income in both contracting states, as has been the case until now.
This is the second act on the part of the Netherlands to establish specific rules for remote work and permanent establishments bilaterally through the protocol. The first such step was bilateral negotiations with Belgium, which resulted in the conclusion of a protocol to the treaty, which specified certain safe harbor rules, in particular as regards the circumstances under which a permanent establishment is or is not created for an employer in the other country. The issue of a permanent establishment is a controversial area in international taxation, in which it is difficult to find a consensus – for example, in the case of Germany, which has long had a reserved attitude towards the concept of the so-called service permanent establishment.
Hong Kong attracts foreign companies by simplifying the rules for moving their headquarters
Hong Kong lawmakers have approved a legislative amendment that introduces a significant simplification of the process of moving the headquarters of foreign companies to Hong Kong (so-called re-domiciliation).
Companies that are not incorporated under Hong Kong law but meet requirements relating to corporate background, integrity, protection of members and creditors or solvency will be allowed to transfer their registered office to Hong Kong without prejudice to their assets, rights, obligations and liabilities, as well as related contractual and legal processes. Hong Kong is also introducing unilateral tax breaks for re-domiciled companies to eliminate possible double taxation they may face during the tax year in which the transfer of residence takes place.
After the transfer of the registered office, these companies shall have a comparable legal status to companies incorporated under Hong Kong law.
European Commission pushes Sweden to change rules for taxation of foreign contractors
The European Commission has decided to refer the case against Sweden to the Court of Justice of the European Union (“CJEU”) because, even after repeated requests, Sweden has not changed its rules regarding tax advances/securement by Swedish taxpayers in relation to payments for services provided by contractors established in another EU or EEA Member State. This advance/securement amounts to 30% of the gross value of the services provided, which Swedish taxpayers – customers are obliged to pay to the Swedish tax authority, unless these contractors are approved by the Swedish tax authority (so-called “F-tax approval”).
The Commission considers that the obligation to collect this advance payment by Swedish taxpayers – customers, even in cases where the foreign contractors do not have a permanent establishment in Sweden and therefore do not incur tax liability there, is contrary to the principle of freedom to provide services.
The European Commission has previously requested Sweden to amend this local regulation because, in the Commission’s view, it is contrary to the rules of Article 56 of the Treaty on the Functioning of the EU and Article 36 of the Agreement on the European Economic Area. Sweden did not respond to this letter of formal notice, so the Commission referred the matter to the Court of Justice of the European Union.
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