Last month’s tax and legal news in a few sentences.
8 October 2019 In brief
DOMESTIC NEWS IN BRIEF
- A notice on concluding a social security treaty between Czechia and Belarus, together with the respective administrative arrangement on its application, was published in the Collection of International Treaties (No. 47 and 48/2019 Coll. Int. t.).
- An informal meeting of ECOFIN held in September under Finish presidency discussed mainly the obsoleteness of the present energy taxation directive. The Czech Republic agreed that some tax exceptions in this area are no longer substantiated and need to be revised: these include the possibility to differentiate between the tax rate on motor oil for business and non-business proposes, and the exemption of air and marine transport.
- A tax rate package (print No. 509) was passed into its final reading by the Chamber of Deputies. Effective 1 January 2019, the bill amends the taxation of tobacco product, spirits and gambling. It also changes the method of creating technical provisions for the purpose of corporate income tax, and regulates the payment of real property tax.
- On 1 October 2019, the new structure of VAT ledger statements entered into effect. More information is available on the General Financial Directorate’s website.
- The Ministry of Labour and Social Affairs let it be known that children´s groups will again become nurseries and will be governed by the amended Act on Nurseries. The new regulation should ensure stable financing (following the example of private preschools), higher quality, and, at the same time, financial availability for families.
- The Chamber of Deputies passed an amendment to the Immovable Property Acquisition Tax Act extending the scope of exemptions of the first acquisition for consideration of ownership right to apartments in newly-built family houses. The amendment has yet to be signed by the president, and will only enter into effect on 1 November 2019.
FOREIGN NEWS IN BRIEF
- The OECD issued mutual agreement procedure (MAP) statistics for 2018, covering eighty-nine jurisdictions including the Czech Republic.
- The proposed 2021 tax reform package currently discussed by the Dutch parliament calls for a reduction of the corporate income tax (CIT) rate to 21.7%, as well as the introduction of a new conditional withholding tax of 21.7% on interest and royalty payments made to low-tax jurisdictions.
- In its latest Brexit Preparedness Communication, the European Commission reiterated its call to all stakeholders to prepare for a ‘no-deal' scenario. The commission also published a checklist to help businesses trading with the UK make final preparations.
- In August 2019, Canada, Switzerland, Ecuador and Serbia deposited their instrument of ratification for the Multilateral Convention (2016) (MLI) with the OECD Depositary. In respect of these countries, the MLI will enter into effect on 1 December 2019; in respect of the United Arab Emirates, on 1 September 2019. In the Czech Republic, the convention is still awaiting its final reading in the Chamber of Deputies. Once it is approved and published in the Collection of International Treaties and the ratification instruments have been deposited with the OECD depositary, three months after the beginning of the month following the deposition, it will also enter into effect in the Czech Republic.