Tax Newsletter - Archive
Forvis Mazars Tax View - archive of tax articles
Accompanying Law to SMER: Key Changes in the Income Tax Act
Single Monthly Employer Reporting Effective from 1 January 2026
As of 1 January 2026, Act No. 323/2025 Coll., on the Single Monthly Employer Reporting (hereinafter “SMER”), will enter into force. The new system significantly changes how payroll data are transmitted to government authorities. It will gradually replace a number of existing forms and reports, thus reducing the administrative burden in terms of the number of filings. However, the volume of reported data will not decrease substantially and, for some employers, may even increase.
Year-End Transfer Pricing Adjustments: More Than a Routine Exercise
In the ever-evolving landscape of international tax, year-end transfer pricing adjustments have become a critical touchpoint where tax, accounting, and legal risks converge. Far from being a routine exercise, they now play a central role in determining whether a group’s intercompany pricing policies can withstand regulatory scrutiny. For multinational enterprises, the way these adjustments are planned, executed, and documented can be the difference between demonstrating robust compliance or triggering disputes, double taxation, and financial penalties. What was once considered a technical formality is now a strategic moment – one that demands coordination, foresight, and cross-functional alignment.
The Schwarz System Under Scrutiny by the Courts: Recent Ruling by the Municipal Court in Prague
The Supreme Administrative Court Assessed Markup on Material Costs: What Does This Mean for Manufacturing Companies?
The judgment of the Supreme Administrative Court (hereinafter "the Court") ref. no. 1 Afs 2/2025–54 of 21 May 2025 brought a new perspective on the assessment of the arm’s length profit markup on costs. The case concerned a Czech company (contract manufacturer) that provided manufacturing services to its parent company and was remunerated for this activity on the basis of costs incurred and a profit markup. As part of this activity, the Czech company purchased material from the parent company and used them to manufacture products that it sold to independent customers.
Are You Obliged to Adjust VAT Deductions for Overdue Liabilities?
Following an amendment to the VAT Act effective 1 January 2025, which concerned the correction of VAT deduction for overdue liabilities, the General Financial Directorate disclosed explanatory information (hereinafter as 'the GFD Information') at the beginning of July 2025.
Amendment to the Top-Up Tax Act
In the first half of August this year, the long-awaited adoption of the government proposal for a law amending the Accounting Act, the Auditors Act, and the Top-Up Tax Act was approved. The enacted legislation was published in the Collection of Laws on September 2, 2025, and became effective on September 3, 2025. This article focuses on the amended provisions of Act No. 416/2023 Coll., on Top-Up Tax for Large Multinational Groups and Large Domestic Groups (hereinafter referred to as the “Top-Up Tax Act”).
Schwarz System under Scrutiny Again: Supreme Administrative Court Confirms Strict Approach
The Supreme Administrative Court of the Czech Republic (hereinafter “SAC”) has once again taken a firm stance against illegal freelance arrangements that, in reality, meet the criteria of an employment relationship. In its recent ruling (8 Ads 65/2024-53), the Court made it clear: contractual form is not enough—what matters is the actual substance of the working relationship.
Flexible Amendment to the Labour Code
On 29 April 2025, the so-called “flexi amendment” to the Labour Code (Act No. 262/2006 Coll., as amended) was published in the Collection of Laws. It represents the most extensive change to labour law in recent years. Most of its provisions will take effect on 1 June 2025.
Taxation of Employee Stock and Option Plans: Overview of the Current Situation
Several significant legislative changes have occurred in recent months regarding the taxation of employee stock and option plans (hereinafter "ESOP"). We would like to provide you with an overview of the current state of this issue and help you navigate it.