Case law
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…
Is it possible to maintain right to deduct even in chain fraud?
The Supreme Administrative Court in a recent judgment dealt with the right to deduct tax on a supply provided within a fraudulent chain of transactions. The tax administrator did not fully prove that the taxpayer knew, or could have known, that the…
Caution above all: pending litigation clauses in share transfer agreements
Agreements on the transfer of a share in a business corporation quite often contain clauses on pending court disputes and possible future debts of the company being purchased. In such cases, the arrangement may be that the debt shall be paid by the…
Penalty for filing VAT ledger statement for incorrect taxable period
In case 5 Afs 281/2021-34, the Supreme Administrative Court (SAC) dealt with the question of whether a CZK 50,000 penalty had been legitimately imposed on an entity who had incorrectly filed a VAT ledger statement for a previous period. The SAC…
VAT treatment of sub-participation agreements
The Court of Justice of the European Union (CJEU) has dealt with the question whether sub-participation agreements, whereby a creditor under a credit agreement (a lender) transfers the credit risk to a third party, are covered by the exemption from…
CJEU on right to deduct VAT upon entering liquidation
The Court of Justice of the European Union ruled on whether there is an obligation to correct the previously claimed VAT deduction on capital goods if a company enters into liquidation and applies for VAT deregistration.
Definition of concern group for actions to set aside under insolvency act
The Business Corporations Act defines a group (a ‘concern’) as follows: one or more persons subject to single management by another person or persons form a concern group with that dominant person. However, the concept of a concern group is also…
Right to deduct where supplier has not paid output VAT
In case C-227/21 HA.EN. the Court of Justice of the European Union (CJEU) dealt with whether a supply recipient has the right to deduct VAT if they knew or should have known that the supplier was not going to pay output VAT because of financial…