direct taxes


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

Tax changes in the taxation of investment funds: New corporate rate of 19 %

In the June issue of dReport, we informed you about the amendment included in the planned change in the taxation of basic investment funds. On 19 July 2018, an act was adopted (with effect from 1 January 2019) which includes a narrowing of the definition of a basic investment fund, and removes from the definition those funds whose shares are admitted to trading only on the European regulated market and do not fulfil the other conditions enumerated by law. These funds will now be subject to the standard corporate rate of 19% and not the current rate of 5%. 

26. 9. 2018

Currently on ATAD implementation

The proposed amendment to the Income Taxes Act (included in the government package of tax law amendments), whose primary objective is to implement the EU Anti Tax Avoidance Directive – ATAD from 1 January 2019, is awaiting debate in the Chamber of Deputies in the first reading. A question mark is therefore beginning to appear regarding whether or not the proposed amendment will be able to go through the whole legislative process by the year end. 

25. 9. 2018