18 July 2017

Country-by-country reporting – changes on the horizon

At the last session of the Chamber of Deputies of the Czech Republic, further progress was achieved in passing the amendment to the Act on International Cooperation. The Act implements a new information exchange duty, i.e. country-by-country reporting, into Czech legislation

Daniel Szmaragowski
Soňa Saidlová

The amendment will bring new duties for companies that are a part of multinational groups with a total consolidated turnover exceeding EUR 750 million. For these groups, a report will have to be filed containing basic information broken down by individual countries. At the same time, individual companies that are a part of such groups will have to notify the tax authorities of the reporting entity for the group – in the Czech Republic, this duty shall be complied with by giving a notice. The notice shall be filed with the Specialized Tax Authority, irrespective of the local jurisdiction of the individual company.

According to amending proposals passed by the chamber of deputies in the third reading on 12 July, 31 October 2017 shall be the last day for filing the notice for all periods ended before 31 October 2017. The deadline for filing the country-by-country report remains unchanged, meaning it has to be filed within 12 months after the end of the period for which it is being filed. The Act will enter into effect upon its promulgation.

As the deadline for filing the notice is approaching, the tax administration is making final cosmetic changes to the electronic form through which the notice, and later the report, shall be filed. The form shall be completed and sent through EPO, the tax administration’s tax portal. This will be the only admissible manner of filing, with a verified electronic signature or identity verification by logging into a data box. Most likely, no other alternatives of filing the notice will be offered. 

Where a Czech company has the duty to file the country-by-country report, it will send the report in.xml format, via a uniform EPO form. According to information available to us, the company itself will be responsible for creating the .xml file. The duty to create the .xml file will, nevertheless, only concern a couple of companies in the Czech Republic.

Should you be interested in our assistance with filing the notice or preparing the report, do not hesitate to contact us.

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