Tax

Remission of social security and health insurance sanctions

Removal of the harshness of law, i.e. penalty remission, is not only applied as part of tax proceedings. Very often, a penalty is imposed for late health insurance and social security payments. These penalties can reach very high amounts. On the other hand, these sanctions can also be remitted under the Act on Public Health Insurance and the Act on the Organisation and Implementation of Social Security. However, the remission of social security and health insurance penalties are subject to entirely different rules than the remission of tax sanctions. 

25. 10. 2021

New personal income tax forms

Following the amendment to the Income Taxes Act effective since 1 January 2021, a decree of the Ministry of Finance (No. 335/2021 Coll.) was published in the Collection of Laws after more than 8 months, amending and supplementing the relevant Personal Income Tax Return forms (included in Decree No. 525/2020 Coll.). The decree allows taxpayers to file a tax return for 2021 (or a part of the year beginning on or after 1 January 2021) and correctly calculate the relevant tax, which would not be possible in some cases in the form valid for 2020. 

22. 10. 2021

In Brief from International Taxation [October 2021]

Germany will allow partnerships to tax income as corporations through corporate tax. The Finnish Supreme Administrative Court has issued a ruling regulating the rules restricting the tax deductibility of interest expenses. The European Union has included Hong Kong in the list of non-cooperative tax jurisdictions in Annex II, together with a commitment to adjust the tax exemption regime for foreign income. This and more can be found in current news from the field of international taxation. 

21. 10. 2021

VAT news [October 2021]

Starting from the next year, changes in the VAT application in the provision of performance subject to a special scheme for travel agents will take effect. According to the Court of Justice of the European Union, the decision of the Member States on what performance will be subject to the reduced tax rate depends for example on an assessment of the perspective of an “average” consumer. Another statement by the CJEU related to a decrease in the tax base for a pharmaceutical manufacturer who made a subsequent bonus payment to a state health insurer based on a contract. We will provide more details in our October VAT News. 

21. 10. 2021

Information of the General Financial Directorate on transfer pricing in financial transactions

On 9 August 2021, the General Financial Directorate issued information on the guidance on transfer pricing in financial transactions (the “Information”) in which the General Financial Directorate refers to Transfer Pricing Guidance on Financial Transactions (the “Guidance”) published by the Organisation for Economic Cooperation and Development (the “OECD”) in February 2020. Together with the Information, the General Financial Directorate published an unofficial translation of the Guidance into Czech. 

20. 10. 2021

Reintroduction of exemption of non-residents’ interest income from so-called Eurobonds

On 30 September 2021, an amendment to the Banking Act was published in the Collection of Laws, which was altered during the legislative process to also include an amendment to the Income Tax Act. This amendment reintroduces the exemption of non-residents’ interest income from so-called Eurobonds, i.e. bonds issued abroad by taxpayers with registered seat in the Czech Republic effective from 1 January 2022. 

20. 10. 2021