Direct Taxes

Tax 

What to watch out for when combining public support (subsidies or investment incentives) and R&D tax-deductible items?

Experience shows that a large number of companies only use one form of public support, whether these are subsidies or investment incentives, or an R&D tax-deductible item. In fact, these companies are often entitled to using several forms of support at the same time, combining them in an efficient manner and thus maximizing the benefits. Combining various forms of support, however, involves certain rules that need to be observed. 

23. 6. 2021
Tax 

The Supreme Administrative Court has issued its first-ever statement on one-crown bonds

Recently, the Supreme Administrative Court was deciding for the first time on a case involving “one-crown bonds”. Surprisingly, the subject matter of the dispute did not concern the abuse of rights. The question was whether the company had proved the tax deductibility of bond interest in line with Section 24 (1) of the Income Tax Act. The Court agreed with the tax authorities on this matter and confirmed additional tax assessment. It should be pointed out that the factual circumstances of the case were specific. 

23. 6. 2021
Tax 

Deadline for filing the income tax return: what to be aware of?

As we have already informed you, the rules modifying the deadlines for filing the income tax return changed on 1 January 2021 following the amendment to the Tax Code. These rules already relate to the taxation period of the calendar year 2020 and reporting period ended 31 December 2020 or later. Meanwhile, the Financial Administration issued the Methodical guideline for the application of the tax return filing deadline. In this article, we are presenting some interesting insights from the current practice and methodology of the financial administration that may have a practical impact on meeting the deadline by taxpayers. 

27. 5. 2021
Tax 

Tax Perspective of Interpretations of the National Accounting Board I-42 and I-43

In January 2021, we informed you about newly issued interpretations of the National Accounting Board I-42 and I-43 that cover the financial reporting of the exchange rate risk in receivables denominated in foreign currency with a recognised provision and prepayments made in foreign currency. In today’s article, we would like to follow up on that and analyse these two interpretations from the tax perspective. 

26. 5. 2021
Tax 

Monetary Meal Allowance: what pitfalls may occur when it is used?

With effect from 1 January 2020 and after more than 30 years, employers are thanks to the Amendment to the Income Taxes Act allowed to provide their employees with a meal contribution in financial form without having to prove its purpose. According to the Ministry of Finance’s statement, the “monetary meal allowance” is an addition to the current tax benefits for catering. What are the rules of its provision and what should not be forgotten so that employers can fully use the tax benefits? 

25. 5. 2021
Tax 

Briefly on the reporting obligation under DAC VI

On 1 January 2021, a new obligation was introduced to notify tax authorities of certain cross-border transactions and other arrangements that meet characteristics defined by law. Due to a lack of clarity on this issue, either in terms of the actual meaning of the terminology used, situations that may be subject to reporting, or the procedures, we try to address this issue in our dReport on a regular basis. We have come up with a brief summary of the latest development and news for you. 

25. 5. 2021
Tax 

Tax waiver in relation to a professional education allowance

On 27 April 2021, the Minister of Finance issued another resolution on waiver of income tax on the grounds of an extraordinary event caused by the coronavirus spread. This time, it relates to the income tax corresponding to the tax liability arising from the breach of the condition of the operational time of assets used for professional education under Section 34g (1) of Act No. 586/1992 Coll., on Income Taxes, as amended (Income Taxes Act). 

11. 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