News in Brief, July 2024

BRIEFLY FROM HOME

• The GFD has published a position paper to ensure the uniform administration of top-up taxes, which refers to the OECD's previously approved methodological guidance on the global minimum tax. These materials form the basis for EU Council Directive 2022/2523 and Act No. 416/2023 Coll., on top-up taxes. The GFD notes that to maintain uniformity of interpretation and unambiguity of the rules, the documents will not be translated into Czech. The GFD has made clear that it would provide methodological support through expert meetings with taxpayer representatives and professional organisations.
• In its press release, the Ministry of Finance has confirmed its clear intention to extend until 2026 the tax deductibility of aid to Ukraine in the extent provided by Act No. 128/2022 Coll., on tax measures in connection with the armed conflict in the territory of Ukraine caused by the invasion of the Russian Federation.
• The GFD has issued its information on the exemption of income from meals for former employees on a retirement or disability pension from income tax. This non-financial benefit in form of a meal allowance provided to such former employees is exempt from tax up to a limit of CZK 116.20 per calendar day (for 2024) pursuant to Act No. 163/2024 Coll. (consolidation package). The exemption shall apply retroactively from 1 January 2024, which means that employers can make corrections to income tax and insurance prepayments already paid.
• Financial Bulletin No. 5/2024 has disclosed a ‘List of contracting states applying the common reporting standard and deadlines’ and a ‘List for the purposes of fulfilling the information obligation pursuant to Act No. 164/2013 Coll., on International Cooperation in Tax Administration.’

Selected regulations published in the Collection of Laws in June:

• Act No. 163/2024 Coll., amending Act No. 240/2013 Coll., on investment companies and investment funds, and related Decree No. 178/2024 Coll., amending Decree No. 247/2013 Coll., on applications under the Investment Companies and Investment Funds Act.
• Act No. 162/2024 Coll., amending Act No. 125/2008 Coll., on transformations of business companies and cooperatives, as amended, and other related acts.
• Act No. 179/2024 Coll., on collective civil proceedings, and related amendments to other acts.
• Act No. 182/2024 Coll., amending Water Act No. 254/2001 Coll., Act No. 114/1992 Coll., Act on the protection of nature and landscape, and Act No. 465/2023 Coll., amending Act No. 416/2009 Coll., on accelerating the construction of transport, water, energy and electronic communication infrastructure (the Linear Construction Act).
• Government Regulation No. 184/2024 Coll., amending Government Regulation No. 240/2014 Coll., on toll rates and toll discounts and on the procedure for applying toll discounts, as amended.

Relating to labour law, immigration, and other laws under the jurisdiction of the Ministry of Labour and Social Affairs:

• Act No. 152/2024 Coll., on extraordinary waiver of penalties on public health insurance premiums. Communication of the Ministry of Labour and Social Affairs No. 177/2024 Coll., announcing the amount corresponding to 50% of the average monthly wage in the national economy for the purposes of the subsistence minimum, and the amount corresponding to 50% and 25% of the average monthly wage in the national economy for the purposes of state social assistance.
• Government Regulation No. 187/2024 Coll. amending Government Regulation No. 220/2019 Coll., on the maximum number of applications for a visa for residence of over 90 days for business purposes, applications for a long-term residence permit for investment purposes, and applications for an employee card that may be submitted at embassies, as amended.
• Government Regulation No. 202/2024 Coll., amending Government Regulation No. 589/2006 Coll., laying down the regulation of working hours and rest periods of employees in transport, as amended, and Government Regulation No. 182/2007 Coll., laying down the specific regulation of working hours and rest periods of members of the fire rescue units of businesses.
• On 1 July 2024, some legislative amendments promoted by the Ministry of Labour and Social Affairs came into force. Inter alia, care allowances have been significantly increased and the mandatory registration of agreements to perform work (outside employment) has been introduced. The Czech Republic is also opening up more to qualified workers from safe countries. Two government regulations proposed by the ministry are also coming into force.
• As of 1 July 2024, amendments to additional pension savings and supplementary pension insurance came into force, changing the amount of state contributions.

Attention should also be paid to the following:

• Deputies have approved an amendment to the Prices Act at third reading. The proposal aims primarily to eliminate cases where the competences of individual pricing authorities to carry out price controls overlap unnecessarily. The main changes include unifying the inconsistent definition of the competence of individual pricing authorities, unifying the rules for issuing price decisions, and unifying terminology across pricing regulations.
• The Ministry of Industry and Trade has prepared an update of the National Artificial Intelligence Strategy (NAIS), which sets priorities and goals in this area until 2030. The key areas of the NAIS are research, development and innovation, education, industry, labour market, ethical, legal and security aspects, public administration, and public services. The updated strategy has been submitted by the ministry to the inter-ministerial comment procedure.

BRIEFLY FROM ABROAD

• On 30 May 2024, Advocate General Juliane Kokott issued her opinion in Case C-432/23. This is yet another decision dealing with the scope of professional confidentiality. The Spanish tax authority asked the Luxembourg authorities for information concerning a Spanish company, to be provided by its Luxembourg lawyer. However, the lawyer refused, pleading professional confidentiality. The Luxembourg Supreme Administrative Court raised a preliminary question regarding the application of professional confidentiality to the exchange of information. According to the Advocate General, services provided by lawyers, including legal advice on matters of company law, are protected by professional confidentiality. 

Summary of developments concerning Pillar 2 in selected countries and the EU

• On 29 May 2024, the Belgian tax administration published a decree containing the details on mandatory registration for top-up tax purposes.
• The German Ministry of Finance has published a draft tax return for domestic top-up tax purposes.
• A ministerial decree implementing transitional safe harbours has been published in the Italian Official Bulletin. 
• Spain has published a consultation paper on the transposition of the EU Minimum Tax Directive.
• Several Swiss cantons have increased their tax rates with effect from 1 January 2024.
• Guernsey, Jersey, and the Isle of Man have announced the introduction of a qualified domestic minimum top-up tax from 1 January 2025.
• The European Commission has called upon six member states (Cyprus, Latvia, Lithuania, Poland, Portugal, and Spain) to transpose the EU Minimum Tax Directive.