COVID-19

Accounting 

Accounting Treatment and Reporting of Government Support and Compensations Provided in Relation to the COVID-19 Pandemic

Although it may seem that the COVID-19 pandemic is on the decline, businesses affected by the epidemic and by governmental anti-pandemic measures can still apply for allowances and support in order to decrease the impact of the current crisis. This article summarises the approaches to the accounting treatment of support and compensations and their reflection in the 2020 financial statements in line with Czech accounting legislation, including new titles that have been approved by the Government only in 2021. 

26. 5. 2021
Tax 

Information of the General Financial Directorate on the effects of the Covid-19 pandemic on transfer prices

On 31 March 2021, the General Financial Directorate issued information on the effects of the Covid-19 pandemic on transfer prices (the “Information”) pursuant to recommendations of the OECD of December 2020 (the “OECD Guidance”). The General Financial Directorate notes that the OECD Guidance does not involve a special recommendation beyond the currently applicable Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (the “Guidelines”), it rather focuses on the application of the arm’s length principle in the context of the pandemic. Below, we summarise the opinion of the finance administration on certain issues which the General Financial Directorate discusses in more detail in its Information. Therefore, it can be assumed that the finance administration will proceed in line with the Information when examining the periods affected by the pandemic, although this does not constitute a change in the relating legislation. Together with the Information, the General Financial Directorate published the translation of the OECD Guidance into Czech. 

26. 4. 2021
Tax 

OECD has released an updated version of the manual for the assessment of international tax aspects following anti-epidemic measures

The updated version summarises the conclusions and recommendations set out in the original version published last spring. At the same time, it offers examples of how different countries approach, within the current situation and restrictive measures, the fulfilment of the conditions for setting up permanent establishments, determining tax residency and the taxation of employees. 

17. 2. 2021