News in Brief, December 2022

DOMESTIC NEWS

• An amendment to the Value Added Tax Act and other tax legislation (Tax Package 2023) which, among other things, introduces a windfall tax with effect from January 2023, has been published in the Collection of Laws under No. 366/2022 Coll.
•  In connection with the tax package, the financial administration has issued its Information on the Increase of the Turnover Limit for VAT registration to CZK 2 million. 
• A communication on the treaty between the Czech Republic and Bulgaria for the avoidance of double taxation and prevention of tax evasion in the field of income and property taxes in relation to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting has been published in Financial Bulletin 14/2022.
• The chamber of deputies has approved the government proposal to abolish the electronic reporting of sales (EET) from January 2023. The senate will now discuss the proposal.
• On 23 November 2022, the treaty between the Czech Republic and the Principality of Andorra for the avoidance of double taxation in the field of income and property taxes was signed. Both countries will now follow the standard legislative process to bring the treaty into effect.
• The financial administration has issued a warning that the Viewing Selected Data service, which has so far allowed access to selected information from personal tax accounts and taxpayers' files maintained by the tax authority, will not be available from 1 December 2022. It will no longer be possible to log in to this service after that date.
• The Ministry of Labour and Social Affairs has announced a call for projects under the Operational Programme Employment Plus, aimed at introducing age management into firms, which involves the management of employees taking into account their age and stage of life.

FOREIGN NEWS

• The OECD has published statistics on international tax disputes resolved with a view to finding mutual agreement between contracting states. In 2021, countries initiated 2,423 new cases, of which 1,050 relate to transfer pricing, including the allocation of profits to permanent establishments, and the remainder to other double taxation issues. The Czech Republic initiated 22 new cases in 2021, of which 12 relate to transfer pricing. For more information, please see here.
• The ECOFIN Council has agreed to revise the Code of Conduct for Business Taxation, an instrument that promotes fair tax competition within and outside the EU. The revised code of conduct will apply from 1 January 2023. The original version from 1997 specifies criteria for identifying harmful tax measures having the nature of preferential tax regimes. The revised code extends the definition of harmful tax measures to any other elements of tax systems that create opportunities for double non-taxation or may lead to multiple tax advantages.
• The EU Council has approved the European Parliament's position on the Regulation on Foreign Subsidies Distorting the Internal Market. The regulation gives the European Commission powers to investigate financial contributions received in non-EU countries by groups operating in the EU internal market if these lead to distortions. Among the contributions that may be investigated are tax exemptions. The regulation thus complements the rules on state aid and will enter into force on the twentieth day following its publication in the Official Journal of the EU.