Direct Taxes


TaxAlert: Complications in calculating the super-gross salary from January 2019

The President of the Czech Republic signed the amendment to the Income Taxes Act on 11 December under which employers will have to distinguish a country in which an employee participates in a system of compulsory insurance (social security and health insurance) in calculating prepayments for employment income tax starting from 1 January 2019. The same procedure will apply to tax returns from the 2019 taxation period. 

11. 12. 2018

GFD’s New Guidance Note on the Binding Assessment of Transfer Pricing and the Method of Determining the Tax Base for Permanent Establishments

On 9 November 2018, a new guidance note, D - 32, of the General Financial Directorate (“GFD”) was published in the Financial Bulletin of the Ministry of Finance on the binding assessment of the pricing method between related parties and the method of determining a tax non-resident’s tax base on activities performed through a permanent establishment (hereinafter jointly as the “binding assessments”). 

27. 11. 2018

Ruling: Correction of Accounting Errors and Tax Base Implications

This article summarises the key information arising from judgment 3 Afs 28/2017 – 43 which was issued in October 2018, addressing two areas as follows: corrections in accounting records including implications for a corporate income tax return (“CITR”) and insurance benefits in relation to an assigned receivable. A cassation complaint of the Appellate Financial Directorate (“AFD”) against Československá obchodní banka (the “Company”) has been rejected. 

22. 11. 2018

The Court’s New View on the Utilisation of Clinical Studies as Part of the R&D Deduction

The Supreme Administrative Court (the “SAC”) has found against Vestra Clinics s.r.o. (the “Plaintiff”) in the matter of the possibility of utilising clinical studies as deductible items for research and development (“R&D”). Although the Court confirmed that clinical studies do meet the definition of R&D (as is, after all, indicated in Guidance Note D-288 and the Frascati Manual), the SAC ruled that the Plaintiff’s activities constitute the following of clearly defined instructions as prescribed by the clinical trial report, without containing any elements of novelty or clarifying scientific uncertainty. 

8. 11. 2018