Tax & Legal Update
Transfer pricing - comparability analysis in times of COVID-19
The unprecedented changes in the economic environment following the outbreak of COVID-19 have created unique challenges for setting prices in intra-group transactions. The correct setting or verification of transfer prices for the past year while…
Remuneration for making funds available using promissory note VAT exempt?
In judgment C 801/19 FRANCK, the Court of Justice of the European Union (CJEU) held that remuneration for the transfer of funds provided by a factoring company to a debtor is, from a VAT perspective, a transaction in securities, therefore exempt…
SC further tightens conditions for withdrawal from non-compete clause
The recent Supreme Court (SC) judgement marks a further tightening of conditions for employers who decide to withdraw from a non-compete clause negotiated with their employee. According to the judgment, arrangements that give the employer the option…
French court outlines new permanent/fixed establishment concept for digital sector
The court’s decision brings an entirely new view on a permanent/fixed establishment for companies operating in a digital sector. Will other EU member states also get inspired?
Right to disconnect? Higher protection of employees in sight
The European Parliament has asked the European Commission to submit a draft directive allowing employees to log off from work after working hours without being sanctioned for such behavior in any way. According to the parliament, the expansion of…
New Foreign Investment Screening Act
On 1 May 2021, the new Foreign Investment Screening Act will enter into effect, introducing tools to review direct investments from third countries for their implications for the Czech Republic’s security and internal order. The act may hinder the…
Act on Registration of Beneficial Owners: six month to update data
The new Act on the Registration of Beneficial Owners has been published in the Collection of Laws and will enter into effect on 1 June 2021. All business corporations must update the data recorded in the beneficial owners' register within six months…
New arrival rules for the Czech Republic
Since 1 March, a new protective measure of the Ministry of Health has been in effect, yet again tightening the rules for arrival from abroad and changing the existing ‘traffic light’ system (Semafor). For the purposes of this measure, foreign…
TA CR announces fourth THETA programme call
On 10 February 2021, the Technology Agency of the Czech Republic announced the fourth call for proposals under the THETA programme supporting applied research, experimental development and innovation.
Deductibility of interest on mortgage loans after 1 January 2021
On 1 January 2021, an amendment to the Income Tax Act entered into effect, reducing the annual limit of interest paid on mortgage loans or building savings loans to be deducted from the tax base from CZK 300 thousand to CZK 150 thousand. Uncertainty…
GFD’s Information on ATAD
The General Financial Directorate (GFD) issued its Information on Measures Arising from the Implementation of the Anti-Tax Avoidance Directive (ATAD), clarifying certain practical issues associated with the restricted deductibility of excess…
Financial administration’s response to queries regarding changes to tax depreciation
Extraordinary tax depreciation, adjusted limits for acquisition costs of tangible fixed assets or the cancellation of the intangible asset category are some of the most significant changes introduced by the January amendment to the Income Tax Act.…