News in brief, April 2022

Last month’s tax and legal news in a few sentences.

DOMESTIC NEWS

  • The government has submitted a bill to the chamber of deputies for next year’s complete abolition of the electronic reporting of sales.
  • The Minister of Finance has decided to waive road tax prepayments for all vehicles and all taxpayers. The ministry is also currently preparing an amendment to the Road Tax Act abolishing the road tax for passenger cars and vans weighing up to 12 t for 2022. This measure is part of the Oil Trio, which also includes the abolition of the mandatory blending of biofuels into fuel (estimated price per litre of about CZK 2), and the introduction of a system to control the profit margins of fuel distributors.
  • The Minister of Finance has also decided to waive VAT-related default interest for February 2022 to August 2022, or for the first quarter of 2022, or the second quarter of 2022, for VAT payers whose predominant part of income for the taxable period in question comes from the transport business. This must be reported to the competent tax authority when filing the regular or supplementary VAT return for the tax period concerned, all on the condition that the tax to which the interest relates must be paid by 31 October 2022 at the latest.
  • The GFD has issued information on the employment of Ukrainian citizens coming to the Czech Republic in connection with the war in Ukraine. It mainly concerns the application of tax credits and tax reliefs for children in 2022. Employers will treat these persons in the same way as other employees, taking into account whether the employee is a Czech tax resident or a non-resident and whether they sign a payroll tax statement.
  • The financial administration has launched a service that temporarily replaces the functions of the original Tax Information Box. The service "Viewing selected data" will allow access to selected information from personal tax accounts and taxpayers’ files maintained by the tax authority and will be available for a temporary period of nine months. This will give taxpayers more time to log in to the modernised Tax Information Box Plus.
     

FOREIGN NEWS

  • The OECD has published a commentary to the rules for introducing a global minimum tax (Pillar 2) aiming to provide multinational groups and tax administrations with a uniform and common interpretation. The OECD has also published draft model rules for domestic legislations on defining the range of companies to which Pillar 1 (redistribution of profits to market countries) will apply. For more information, see the OECD’s news and KPMG’s TaxNewsFlash.
  • At its meeting on 15 March 2022, the Economic and Financial Affairs Council of the EU (ECOFIN) failed to reach a political agreement on the revised proposal for an EU minimum tax directive, which harmonises the introduction of a global minimum tax (OECD Pillar 2) across the EU. The compromise text included the deferral of the deadline for introducing the tax from 1 January 2023 to 31 December 2023, or up to 31 December 2027 if there are no more than ten ultimate parent entities in the given member state. Further information can be found here.
  • The Ministers of Finance have reached political agreement on a general approach for the revised proposal for an EU carbon border adjustment mechanism (CBAM) aimed at reducing carbon emissions outside the EU. The Council has agreed to introduce a central registry to be set up at EU level to centralise CBAM declarants (importers). A de minimis exemption for consignments with a value of less than EUR 150 has also been envisaged, aiming to reduce administrative complexity. For more information, please refer to the EU Council’s press release.
  • The European Commission has announced that member states may consider temporary tax measures (e.g., in the form of a one-off tax) to tax unexpected profits generated by energy companies as a result of recent gas price increases.
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