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…

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…

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…

Prevention of double taxation: SAC deals with mutual agreement procedure between…

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.

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…

CJEU: Imports of goods from third countries without the right to deduct VAT?

In the case of Weindel Logistik Service (C-621/19), a company providing repacking services to its customers, the Court of Justice of the European Union (CJEU) confirmed the conclusions of the financial administration and denied the right to deduct…

Holdings: do failed investments and changes in use of inputs lead to correction of…

At the beginning of November, the Court of Justice of the European Union (CJEU) ruled in the case of a Portuguese holding company which intended to acquire another company, but the transaction did not ultimately materialise. The Court was dealing…

Neither creditor nor debtor have to be VAT registered at the time of correcting tax…

Is it compatible with the VAT Directive that both creditor and debtor must be taxable persons for VAT purposes both when providing the supply and when correcting/reducing the taxable amount? The Court of Justice of the EU (CJEU) dealt with this…

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…

CJEU: Right to deduct VAT in full also for expenses benefiting a third party

In the Vos Aannemingen case (C-405/19), the Court of Justice of the European Union (CJEU) dealt with whether it is possible to deduct, in full, input VAT on expenditures that benefited a third party, and when such benefit shall be regarded as…

CJEU rules on adjustment of deductions claimed for capital assets

What is the situation as regards the modification/correction of VAT deductions claimed on capital assets if their use changes? And what if the assets have not yet been used but their intended use has changed? These were some of the issues the Court…