News in Brief, August 2022
Last month’s tax and legal news in a few sentences.
1 August 2022 In brief
- The double taxation treaty with San Marino entered into force on 19 July 2022 and will enter into effect on 1 January 2023.
- The Ministry of Finance has published its Report on the Activities of the Czech Financial Administration and Customs Administration for 2021.
- The GFD has updated the Certificate of Exemption from VAT or Excise Duty prescribed form (effective from 1 July 2022) to reﬂect changes to EU regulations introducing new VAT and excise duty exemptions for EU defence purposes.
- The General Customs Directorate points out that as a result of changes to the Air Protection Act and related tax regulations the obligation to blend biofuels into fuel was abolished as at 1 July 2022, while also abolishing, among other things, the obligation for suppliers of petrol and diesel to submit a notification of compliance with the obligation to provide a minimum quantity of biofuels during the calendar year. The obligation has been abolished for the period April to June 2022 and subsequently for the submission of the annual statement for 2022.
- The Labour Market Forecasting - KOMPAS project of the Ministry of Labour and Social Affairs, ﬁnanced from the Operational Programme Employment, shows the direction of the labour market at the national and regional level over the next five years. KOMPAS is intended for the professional public and all those interested in optimum employment in a changing labour market.
- The financial administration authorities have launched a targeted inspection effort to verify the accuracy of taxation of income related to cryptocurrencies (e.g., bitcoin).
- The government is considering introducing a windfall profits tax. It should mainly concern energy companies whose profits have grown because of external influences. Profits above a company's average profit over the last five years would be liable to a tax of between 40% and 60%. The introduction of this tax is also being considered for other sectors making windfall profits due to the situation on world energy markets.
- The Czech EU presidency has announced that it will focus on the finalisation of the implementation of the proposed EU Minimum Tax Directive with a view to reach a unanimous agreement in the ECOFIN Council at the next scheduled meeting on 4 October 2022. An updated list of non-cooperative jurisdictions should also be discussed at this meeting.
- The tax topics on the agenda for the ECOFIN meeting on 6 December 2022 are as follows:
- a progress report on the proposal for a council directive to prevent the misuse of shell companies (the Unshell Directive) and proposal for a council directive laying down rules on a debt-equity bias reduction and on limiting the deductibility of interest for corporate income tax purposes (the DEBRA Directive)
- political agreement on the Carbon Border Adjustment Mechanism (CBAM)
- a policy debate on the implementation of the global agreement on reallocation of taxing rights (Pillar One) and on the revision of the Energy Taxation Directive.
- According to the OECD Secretary-General Tax Report to G20 Finance Ministers and Central Bank Governors, Pillar 1 and Pillar 2 addressing the tax challenges arising from the digitalisation of the economy have been delayed. Pillar 1, which changes the principle of the allocation of taxing rights, should be completed so that a new multilateral convention may be signed in the first half of 2023 (with entry into force in 2024). The technical work on a 15% global minimum corporate tax rate is largely complete. The OECD also recognises that most Inclusive Framework members are planning for an entry into force not earlier than 2024.
- The OEDC has also released a progress report on Amount A of the OECD Pillar 1 solution to reallocate profits of multinational enterprises to market jurisdictions. The progress report includes a consolidated version of example domestic model rules that will also serve as the basis for a multilateral convention.