Tax 

Changes in the Implementation of Double Tax Treaties Applicable From 2019 Onwards

On 1 January 2019, the new Treaty for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital that the Czech Republic signed in 2016 with Turkmenistan will start to be implemented.

The principal concepts of the treaty include:

  • A time limit for forming a permanent establishment of 12 months for construction projects and 6 months for services;
  • Withholding tax on passive income of 10 % at maximum (exceptions apply to interest); and
  • Application of the credit method in respect of double taxation.

Furthermore, from the New Year onwards, the most-favoured-nation clause treatment will be applied in relation to the Treaty for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital between the Czech Republic and Chile (specifically Section 11 (7) of the Treaty which makes it possible to apply more favourable terms based on the treaty signed at a later date between Chile and Japan). As a result, from 1 January 2019 onwards, provided all the stipulated conditions are met, the rate of 10% of gross interest will be applied between the Czech Republic and the Republic of Chile for the purposes of Section 11 (2) (b) of the above stated tax treaty.

In this context, the Ministry of Finance has also updated the Summary of Valid Treaties, which is available on its website.

The article is part of dReport – January 2019, Tax news; Grants and investment Incentives.

Implementation of Double Tax Treaties Turkmenistan Chile International Taxes dReport newsletter
Tax 

In Brief from International Taxation – June

Austria is considering introducing the digital service tax as of 1 January 2020. Based on the CJEU the national courts are not eligible to determine if certain requirements of a state aid regime are compatible with the fundamental freedoms. Aruba, Barbados and Bermuda were removed from the list of non-cooperative jurisdictions. German Lower Tax Courts introduces new interpretation of anti-treaty shopping rules. The Dutch appellate court decided that there is no reason for TP adjustment to a hybrid loan. Poland introduced the rules for defining a beneficial owner. 

20. 6. 2019
Tax 

VAT News in June

With regard to the changes in the conditions of cross-border trading with goods in the EU from January 2020, the European Commission has published material with a description of selected aspects of the new rules. The General Financial Directorate (GFD) is finishing its work on the methodological note concerning the VAT treatment of the issuance and distribution of vouchers. What is new at the Court of Justice of the European Union (CJEU)? This and much more is debated in detail in the VAT news for June. 

18. 6. 2019