SAC yet again stands up for taxpayers
The Supreme Administrative Court (SAC) has confirmed that a payment to an unpublished bank account does not in itself give rise to the taxable supply recipient’s liability for unpaid VAT. It is always necessary to also prove that the taxpayer knew…
SAC stands up for taxpayer over deducting costs of destroyed goods
The Supreme Administrative Court (SAC) upheld a taxpayer's cassation complaint in a dispute over the legitimacy of claiming costs/expenses for destroyed goods. According to the SAC, without informing the appellant the appellate body assessed the…
Disposal costs of part of new assets’ input price?
With judgment No. 10 Afs 346/2020-43, the Supreme Administrative Court (SAC) has significantly contributed to clarifying when the costs of disposal of assets may be deducted from the tax base directly, and when they constitute investments and shall…
Is additional tax assessment due to VAT fraud reason enough not to waive penalties?
If the tax administrator concludes that a VAT payer has even indirectly been involved in VAT fraud (typically, by having accepted a delivery affected by fraud), the entitlement to VAT deduction will be withheld from the payer. The payment of…
SAC on existence of a permanent establishment
In its recent decision, the Supreme Administrative Court (SAC) dealt with selected facts giving rise to a foreign entity’s permanent establishment in the Czech Republic. In particular, the court pointed out that the tax administrator must produce…
SAC on proving indirect shareholding expenses
The Supreme Administrative Court (SAC) has recognised that it is not easy to prove the exact amount of overhead (indirect) expenses related to holding a share in a subsidiary. However, this practical pitfall does not change the fact that if a…
Watch out for the deadline for filing additional tax returns
In its recent decision, the Supreme Administrative Court (SAC) confirmed that the deadline for filing additional tax returns for a lower tax liability is based on a subjective lapse period – in other words, after that period expires, it is no longer…
VAT stated in a tax document for a fictitious transaction must be paid
In 8 Afs 21/2014-30 case, the Supreme Administrative Court (SAC) corrected the regional court’s interpretation of Section 108(4)(f) of the VAT Act. The provision stipulates that the person issuing a tax document indicating tax is also obliged to…
Prevention of double taxation: SAC deals with mutual agreement procedure between Czechia and Germany
The Supreme Administrative Court (SAC) has held that it is not for a court to determine whether any agreement concluded with another contracting state under a double tax treaty is invalid.
SAC defines difference between contract and foreign employees
The Supreme Administrative Court (SAC) has clarified the definition of a contract employee and a foreign employee as set out in the Sickness Insurance Act. The distinction between these two categories of employees working in the Czech Republic is…
SAC sanctions CZK 1 mil fine for ‘Svarc’ system
In its June 2020 judgement, the Supreme Administrative Court (SAC) dealt yet again with the ‘Svarc’ system. The court held that a CZK 1 mil fine for allowing illegal work had been rightly imposed by the Labour Inspection Office. The decision should…
Landmark case-law: softer penalties for transfer prices incorrectly set by companies receiving investment incentives
The Supreme Administrative Court (SAC) has issued a ground-breaking judgment for companies drawing investment incentives under older schemes. The court confirmed that the failure to meet the condition not to increase the tax base for calculating tax…