The Recovery Package in the context of tax changes
Following the Government announcement on the Recovery Package, the related amendment to the tax regulations was published. Below we summarise a selection of the most important changes in this area.
On 4 October 2022, the EU Council decided within a regular ECOFIN meeting to add Anguilla, The Bahamas and the Turks and Caicos Islands to the EU list of non-cooperative jurisdictions for tax purposes. With these additions, the EU list now consists of 12 jurisdictions: American Samoa, Anguilla, The Bahamas, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, the Turks and Caicos Islands, US Virgin Islands, and Vanuatu.
Given that some countries allow the automatic application of a punitive tax regime against countries on this list, we recommend checking the impact of any potential changes. For example, in the Czech Republic, in the case of a controlled foreign company which is a tax resident of a country on the list at the end of its tax period, the Income Taxes Act implies that the conditions for the application of taxation of its income at the level of the controlling company in the Czech Republic are met (application of the CFC rules, refer to Section 38fa(2) of the Income Taxes Act).
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