Tax & Legal Update
Upcoming tax changes: an overview
The new government and chamber of deputies have begun another four-year legislative cycle in which they will try to push through their agenda. The implementation of several EU directives may bring about important changes, especially in direct taxes.…
Economic turmoil also affecting transfer prices
Inflation is one of the main economic issues for 2022. The impact of high input prices and disrupted supply chains are other factors businesses must cope with. But there are also other adverse factors. The slowing economy has also revealed new…
Guidance on gradual revenue recognition for construction work
In a recent judgment, the Supreme Administrative Court (SAC) dealt with the method of accounting for revenues from construction work carried out under a contract for work. Is it possible to recognise revenues based on partial invoices issued upon…
Commission clamps down on shell companies
The European Commission released its first proposal for a directive aiming to prevent the misuse of shell entities for tax purposes. Companies without sufficient economic substance will be denied benefits ensuing from double taxation treaties and…
Svarc system under scrutiny: watch out for risky relationship structures
The ‘Svarc system’, where work is performed under a contract governed by commercial law but is in fact a dependent work, is still a widespread phenomenon in the Czech Republic. Legally, dependent work can only be performed in an employment…
CJEU: Excessively high price no reason to refuse right to VAT deduction
In case C-334/20 Amper Metal, the Court of Justice of the European Union has ruled on whether a service recipient is entitled to deduct VAT if the price paid for advertising services is significantly higher than the price usually paid for such…
SAC imposes strict requirements for proving internet advertising
The Supreme Administrative Court continues in its strict trend with respect to the provision of evidence that advertising, in this case advertising on the internet, has taken place. According to the court, a screenshot or the administrator account…
Reform of reduced VAT rates in EU
The current EU rules on VAT rates for goods and services were set almost 30 years ago and need to be modernised to correspond to developments in EU legislation. In 2018, the European Commission therefore proposed a reform of VAT rates, and an…
Ombudsman: how to improve treatment of EU workers
EU legislation aims to ensure that in member states, domestic workers and those from other EU countries are treated equally. A level-playing field is essential for free movement in the EU internal market. However, a recent survey by the Czech…
SAC on rules for mutual representation of states in issuing Schengen visas
The Czech Republic does not have diplomatic representation in all countries whose citizens are subject to visa requirements. The same applies to other Schengen member states. While this does not mean that citizens of those states cannot travel to…
How to present evidence in tax proceedings, or: less is sometimes more
Many of you have no doubt encountered a request for evidence during a tax inspection. However, being overzealous in providing evidence may not always pay off. What specific evidence a taxpayer is required to produce at each stage of a tax…