SAC

Tax 

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
Tax 

The echoes of tax inspections on one-crown bonds

The discussion concerning one-crown bonds is continuing. As repeatedly debated in the media, the Financial Administration continues to carry out tax inspections of the companies which issued so-called one-crown bonds through the end of 2012. Proceeds from these bonds issued through the end of 2012 are not subject to effective taxation due to the rounding down to the whole Czech crown. Although at the time it was a routine form of financing, nowadays, the tax authorities in many cases challenge the economic reasons for placing one-crown bonds, treating the issuance of such securities as an abuse of law with all the related tax consequences. 

22. 8. 2018
Tax 

Demonstrating the Receipt of Intragroup Services: Are you Prepared?

A large number of Czech businesses that are part of multinational groups already have first-hand experience that the Czech tax administration’s approach has undergone a fundamental change in recent years as regards tax audits focusing on related party transactions. The lack of any form of communication with the tax administrator (such as on-the-spot inspections) concerning related party transactions is rather an exception at present. Contrarily, regular contact with tax payers or directly a tax audit of intragroup transactions is becoming common practice. 

22. 8. 2018
Tax 

Defending One’s Tax-Related Rights Is Not a Losing Battle

Although in some cases defence against decisions and procedures of the Tax Administration of the Czech Republic may seem to be a lengthy battle with uncertain outcomes, the recent rulings of the Supreme Administrative Court (“SAC”) often indicate the opposite. In early 2018, the SAC issued two crucial rulings substantially revising the tax authorities’ practice and setting a positive direction towards taxable entities. 

28. 3. 2018