News in brief, August 2024

Domestic news

• The Ministry of Finance has published a summary report on the activities of the Financial Administration of the Czech Republic and the Customs Administration of the Czech Republic for 2023.

• The following was published in the Collection of Laws and International Treaties:
  • Notice of the Ministry of Foreign Affairs 206/2024 on the Treaty between the Czech Republic and the United Arab Emirates for the avoidance of double taxation in the field of income taxes and for the prevention of tax evasion and avoidance
  • Decree No. 218/2024 amending Decree No. 117/2012 Coll., on the detailed regulation of the activities of a pension company and a participation fund
  • Decree No. 219/2024 amending Decree No. 207/2021 Coll., on billing for supplies and related services in the energy sectors
  • Decree No. 222/2024 amending Decree No. 264/2020 Coll., on the energy performance of buildings
  • Amendment to the Labour Code (230/2024) in effect from 1 August 2024.

• Following the completion of the comment procedure, the Ministry of Finance has published a bill amending Act No. 563/1991 Coll., on Accounting; Act No. 93/2009 Coll., on Auditors; and Act No. 416/2023 Coll., on Top-Up Taxes for Large Multinational Groups and Large Domestic Groups:
  • The draft amendment to the Accounting Act and the draft amendment to the Act on Auditors implement EU legislation and include an increase in the thresholds for total assets and for annual aggregate net turnover set as two of the criteria to categorise accounting entities according to their size. They also modify obligations concerning sustainability reports. The proposed effective date of both amendments has been postponed to 1 January 2026.
  • The draft amendment to the Act on Top-Up Taxes has been significantly supplemented following the comment procedure. One of the reasons for the supplementation is to ensure the qualified status of the Czech top-up tax. The bill will now be discussed by the government.

• In July, the government approved an update of the Czech Hydrogen Strategy, which is part of the reforms required by the European Commission under the National Recovery Plan. The government has declared hydrogen to be an important element of Czech energy policy as a replacement for fossil fuels in transport, a carrier for transport and energy storage, a raw material for the chemical industry, and a source of heat.

Foreign news

• In its decision C-623/22 concerning the implementation of Council Directive 2018/822 (DAC 6) in Belgian legislation, the CJEU did not find any facts in the issues under consideration that could render the directive invalid (extension of the reporting obligation to certain indirect taxes, obligation to report arrangements that comply with the law). The court also held that although several key concepts introduced by DAC 6 are broad (e.g., the concept of cross-border arrangements), they are nevertheless "set out in a sufficiently clear and precise manner" and do not constitute a breach of the EU Charter of Fundamental Rights.

• The CJEU has also commented on its previous decision C-694/20 and clarified that the part of the directive requiring advisers to inform other advisers and the client of their confidentiality is only invalid in relation to attorneys. More information can be found here.

• The European Commission has published its Annual Report on Taxation. The report provides an overview of the set-up and performance of EU member states' tax systems.

• The OECD has launched a public consultation on the XML editor and user guide for the Global Information Return (GIR) under Pillar 2. This initiative is intended to facilitate the preparation and submission of the returns and provide a technical format for the exchange of GIR information between tax administrations.

• The OECD Working Party on the Pillar 1 Multilateral Convention has postponed the deadline for signing the agreement to a yet undetermined date (the last deadline was 30 June 2024). No revised timetable has been announced.