The opening article addresses the new Information issued by the General Financial Directorate concerning changes in the application of VAT to real estate effective as of 1 July 2025 and its practical implications. This is followed by an analysis of a judgment of the Court of Justice of the European Union regarding the application of VAT to cost reimbursements in the context of legal representation by an attorney.
In the field of accounting, we highlight changes to the categorisation of accounting entities and the new thresholds for statutory audits, which may affect not only the obligation to have financial statements audited, but also the deadline for filing corporate income tax returns. In a further article, we summarise the adjustments to the parameters for calculating old-age pensions as of 2026.
The case law section of the newsletter focuses on penalties for failure to report tax-exempt income to the tax authorities and the restrictive approach of the Supreme Administrative Court to the remission of such penalties. In the final article, we address the update to the Commentary on the OECD Model Tax Convention concerning the assessment of permanent establishment in the context of cross-border remote work.
We trust that this issue will once again provide you with a useful overview of current developments in the tax environment. On behalf of the entire Forvis Mazars team, we wish you an engaging read.
The General Financial Directorate (hereinafter as ‘the GFD’) published in January 2026 the long awaited Information on the application of VAT to real estate as of 1 July 2025 (hereinafter as ‘the Information’), which reflects legislative and interpretative changes in VAT rules effective from 1 July 2025. Below, we provide our comments on selected changes.
In its recent judgment in case C 744/23 Zlakov, the Court of Justice of the European Union stated that the reimbursement of legal costs by the opposing party, in a situation where a party to the proceedings is represented pro bono by an attorney, constitutes a taxable transaction for VAT purposes.
The recent amendment to Act No. 563/1991 Coll., on accounting introduces substantial changes intended primarily to reduce the administrative burden on small and medium-sized enterprises. The legislative initiative was largely driven by the significant inflationary pressures observed in 2021 and 2022, which resulted in nominal increases in companies’ revenues and asset values without a corresponding...
In 2024, a pension reform was adopted, with its individual measures being gradually implemented between 2025 and 2027. The primary objective of the legislative changes is to strengthen the financial sustainability of the pension system. At the same time, the reform was designed to preserve continuity with the existing legal framework and to avoid significant structural interventions. The reform is...
Tax-exempt income does not mean that no tax-related obligations arise in connection with it. Where an individual receives tax-exempt income exceeding CZK 5,000,000 in aggregate, an obligation arises under Section 38v of the Czech Income Taxes Act to notify such income to the tax authority. The notification must be submitted no later than till the end of the deadline for filing the personal income...
In November 2025, the OECD published a long-anticipated update to the Commentary on Article 5 of the OECD Model Tax Convention on Income and on Capital (the “Commentary”). The update, among other things, significantly affects the assessment of the existence of a permanent establishment in connection with work performed from home (so-called home office arrangements) in another contracting state and...
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