Tax & Legal Update
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.…
2021 amendment to VAT Act introduces deemed supplier concept
The VAT position of electronic interface operators will change dramatically from 1 July 2021. In connection with a planned amendment to the VAT Act relating to e-commerce, individual e-shops ensuring the sale of goods from foreign suppliers will…
OECD on loss situation due to COVID
Lower levels of demand. Disruptions to supply chains. Increases in exceptional, nonrecurring operational costs. These are the key factors which have led to a loss situation faced by many companies of multinational groups during the COVID-19 pandemic…
Third call to apply for COVID – Rent support
The COVID - Rent programme, partly compensating for rent-related expenses for selected retail outlets and facilities providing services, will open for the third time. The third call directly follows the previous call. Moreover, the deadline for…
Waiver of VAT on COVID-19 vaccines, tests, and respirators
The Minister of Finance has decided to waive VAT on supplies of in-vitro diagnostic medical devices for COVID-19 testing and COVID-19 vaccinations. The decision shall be in effect from 16 December 2020 to 31 December 2022 and has been published in…
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…
Providing financial services from the UK post-Brexit
The end of the Brexit transition period has had a huge impact on UK companies providing any kind of financial services. From 1 January 2021, it is no longer possible to enjoy the benefits of the freedom of establishment and freedom to provide…