Case law

Proving services provided by parent company and principle of legitimate expectation

In recent judgment No. 30 Af 57/2021-76, the Regional Court in Brno reminded us how important robust documentation of services is in defending the tax deductibility of expenses. The core of the dispute involved a taxpayer claiming in their income…

CJEU: Is it necessary to pay VAT stated in tax document?

The Court of Justice of the European Union has refuted the Austrian court's belief that any person who indicates tax on a tax document is liable to pay that tax. If the service recipients are only end costumers not entitled to deduct VAT,…

CJEU challenges transaction benefiting from simplified procedure for triangular…

The Court of Justice of the EU ruled on the use of the simplified procedure for triangular transactions. If documents issued by the middle party under the scheme do not comply with the VAT Directive, the scheme cannot be used, according to the court.

Court agrees: bonds issued under commission agency agreement not to be included in…

The court agreed with our tax litigation team in a dispute concerning thin capitalisation rules. When applying the test, the economic substance of the credit relationship should be taken as a basis – the bonds issued for unrelated investors under a…

CJEU on the right to deduct VAT if supplier pretends to be another person

The Court of Justice of the European Union (CJEU) recently ruled that taxpayers involved in tax fraud shall be denied the right to deduct VAT in full, even if the loss of tax revenue (tax evasion) is lower.

SAC on proving identity of customer from another member state

The Supreme Administrative Court (SAC) has referred a preliminary question to the Court of Justice of the EU whether it is possible to deny the right to VAT exemption of supplies of goods to another EU member state if the supply to a specific…

CJEU on awarding free-of-charge vouchers to employees

The provision of vouchers to employees free-of-charge does not always mean an obligation to pay output VAT on the transactions. The CJEU (C-607/20) drew attention to the possibility of employers providing them as part of their economic activity,…

Disguised legal act in payment of dividend to beneficial owner

In its recent judgment, the Supreme Administrative Court (SAC) dealt with a profit distribution payment to a Cypriot company. After assessing the entire context of previous transactions, the SAC held that the actual status had been disguised and…

CJEU on disclosure of beneficial owner information

In EU member states, the legal regulation of beneficial owners and their registration is based on the AML Directive. Under the directive, information on beneficial owners within the territory of member states should be accessible to any member of…

SAC on claiming tax loss from transfer pricing adjustments abroad

Transfer prices are at the heart of many disputes with tax administrators not just in the Czech Republic but also abroad, often dragging on over many years. If tax is additionally assessed for one of group companies abroad, is it at all possible to…

CJEU on determining place of supply for services provided within VAT chain fraud

According to the basic rule, the place of supply for granting emission allowances is the place of the service recipient. Involvement in tax fraud has no effect on this determination, ruled the CJEU in case C-641/21 Climate Corporation Emissions…

Monetary contribution to employee vacation: taxable income

In its recent decision, the Supreme Administrative Court upheld the state authorities’ interpretation as to what can be considered a non-monetary benefit to an employee from an employer. The ruling has implications for the exemption of the benefit…