18 April 2018
Latest news - April 2018
Last month’s tax and legal news in a few sentences.
- On its website, the financial administration posted a new prescribed form for the disclosure of transactions between related parties as a separate attachment to line 12 of section I. The form is valid for taxable periods started in 2017 and for parts of the taxable periods started in 2018 with the filing deadline expiring before 31 December 2018. Compared with the form valid in the prior period, the current form requires the disclosure of additional information such as lease-related revenues and expenses or received or granted financial and bank guarantees. The duty to fill in this appendix also applies to financial institutions.
- In July 2016, the European Parliament and the Council of the European Union adopted a regulation on promoting the free movement of citizens by simplifying the requirements for presenting certain public documents in the European Union. This regulation is applicable from 16 February 2019. It introduces multilingual standard forms facilitating the free movement of persons within the Union by removing certain formalities such as translations.
- On its website, the GFD points out that income from accommodation or transport of persons generated by means of internet platforms, such as Airbnb, Booking, Uber, etc., is liable to income tax and should be included in the 2017 income tax returns.
- The Ministry of Finance announced that the double taxation treaty between the Czech Republic and Turkmenistan entered into force on 27 March 2018 with effect from 1 January 2019.
- In March 2018, the OECD issued additional rules for the attribution of profits to permanent establishments. These rules should be used for permanent establishments whose definition was adjusted by the amended OECD Model Convention and primarily apply to permanent establishments arising from activities carried out based on consignment and similar agency contracts or from combined activities. The new rules, dealing with both the creation of a permanent establishment and the allocation of its profit, should be used where a double taxation treaty contains the adjusted definition of a permanent establishment. However, this does not apply to the Czech Republic, as it decided not to include these new rules into its existing treaties. Nonetheless, it can be expected that the new rules will have an impact on the current interpretation of permanent establishments as well as on current business models.
- In March, the European Parliament approved the text of a directive on the common corporate tax base (CCTB) and a directive on the common consolidated corporate tax base (CCCTB). Both draft directives were already submitted by the European Commission in autumn 2016. However, their final adoption is conditional upon the unanimous consent of all EU member states.
- The Supreme Administrative Court has recently challenged the tax administration’s approach to the use of securing orders (the AB Chemitrans case). According to the SAC, it is not possible to treat two groups of taxpayers differently, i.e. to require the first group (taxpayers who have already been affected by securing orders) to pay VAT even before the tax is determined by a decision that has entered into legal force, whereas the second group (other taxpayers) would only be required to pay the tax and a penalty after the notice on tax assessment has entered into legal force. In the SAC’s opinion, this would constitute a violation of the equal treatment principle. The SAC clarified that the date of determining the tax shall be understood to be the date when the tax is determined by a decision that has entered into legal force.