Tax Newsletter - Archive
Forvis Mazars Tax View - archive of tax articles
Changes in the waiving of fines for control statement and tax sanctions
The Financial Administration amended the conditions for the waiving of fines for not submitting a control statement and issued a new instruction concerning the general waiver of tax accessories.
Donations provided in 2023 in connection with the military conflict on the territory of Ukraine
At its meeting in January 2023, the Government of the Czech Republic approved a proposal to extend the validity of measures in the field of taxation in connection with the military conflict on the territory of Ukraine caused by the invasion of the army of the Russian Federation. This measure was originally adopted by Act No. 128/2022 Coll., which indirectly amended the income Taxes Act and which originally applied only to donations provided in 2022. However, as the armed conflict in Ukraine continues to rage on, while citizens and business entities continue to provide assistance to Ukraine and its population, the government approved the extension of these measures for 2023.
The case of the Court of Justice of the EU amends the current practice in triangular trade
In its recent decision C-247/21 Luxury Trust Automobil, the Court of Justice of the EU (‘CJEU’) expressed, somewhat surprisingly, the view that the correct content of invoices for triangular trade has a major impact on the possibility of applying this regime.
Tax (non)deductibility of re-invoicing expenses
We are bringing the conclusions of the court case of the Supreme Administrative Court (hereinafter referred to as the “SAC”) in the area of the application the Section 24 (2) (zc) of Act No. 586/1992 Coll., on Income Taxes (hereinafter referred to as "ITA"), as amended by the end of 2014. In the considered case, the tax administrator assessed an additional tax and a penalty for the tax periods of 2013 and 2014 to the taxpayer. The reason for this was that the taxpayer included representation expenses in the tax deductible expenses pursuant to the aforementioned provisions of ITA.
The payment of a profit share concealed by the sale of shares
In a recent court case, the Supreme Administrative Court (SAC) dealt with the payment of a profit share to a Cypriot company coming from a Czech company. The SAC came to the conclusion that the actual legal situation had been concealed, when the main purpose of the legal acts was the majority shareholder's intention to avoid taxation in the Czech Republic when paying the profit share. It thus agreed with the conclusions of the tax administrator, which assessed an additional withholding tax that was supposed to have been withheld when the profit share was paid to a natural person, the beneficial owner of the income.
Tax deductibility of interest on an acquisition loan – abuse of law
After a longer time, a court decision has appeared in the Czech Republic that is positive for the taxpayer as part of the issue of the tax deductibility of interest on an acquisition loan and the application of the institute of abuse of law. So far, however, this is only the decision of the regional court and the tax administration has filed a cassation appeal in the matter, which will therefore have to be assessed by the Supreme Administrative Court.
The effects of automatic data boxes from January 2023
As of 1 January 2023, Act No. 457/2022 Coll. (hereinafter referred to as the “Act”) amending Act No. 300/2008 Coll., on Electronic Acts and Authorised Document Conversion, as later amended, and other related laws, extends the circle of persons to whom data boxes are established automatically by law. Compared to the original legislative plan, data boxes (namely data boxes of the type “data box of a natural person”) are not legally established by law for the persons not performing business activity. Nevertheless, such persons may have a data box of a natural person established based on the request.
Discount on social security contributions for part-time employees
On 1 February 2023, Act No. 216/2022 Coll., amending Act No. 589/1992 Coll., on Social Security Premiums and the Contribution to the State Employment Policy, will come into effect, which will allow employers to apply a discount on premiums for selected employees in part-time employment or service. The aim of the amendment is to motivate employers to create part-time contracts for people who are usually unable to work full-time and can thus be at a disadvantage on the labour market.
Waiver of a fine for the non-notification of exempted income
Taxpayers - natural persons are obliged, in accordance with the provisions of the Income Tax Act (hereinafter referred to as the “ITA”), to notify the tax administrator of the receipt of income exempt from this tax if the individual income exceeds CZK 5,000,000. Only income that the tax administrators can obtain from registers or records available to them (e.g., exempt income from the sale of a family house) does not need to be reported.
DAC 7 – digital platforms and sellers
In mid-November the president signed the amendment to Act No. 164/2013 Coll., on International Cooperation in Tax Administration, implementing the Council Directive (EU) on administrative cooperation in the field of taxation, i.e., the DAC 7 Directive, which introduces a new scope of the automatic exchange of information, effective from 1.1.2023.