Last month's news in one or two sentences.
DOMESTIC NEWS
In January, the Ministry of Finance issued several Financial Bulletins with the following content:
- GFD’s Instruction No. D-66 setting uniform FX rates for the 2024 taxable period pursuant to Section 38 of Act No. 586/1992 Coll., on Income Taxes, as amended until 31 December 2024. This instruction replaces the original GFD’s Instruction No. D-65 issued on 13 January 2025, which incorrectly stated the exchange rate for the Turkish lira.
- A list of contracting states applying the common reporting standard and decisive days and a list for the purpose of fulfilling the information obligation pursuant to Section 13s(1) of Act No. 164/2013 Coll., on International Cooperation in Tax Administration and on Amendments to Other Related Acts, as amended ("List of Contracting States").
- A list of countries exchanging country-by-country reports (CbCR) pursuant to Act No. 164/2013 Coll., on International Cooperation in Tax Administration and on Amendments to Other Related Acts, as amended.
- The Ministry of Finance draws attention to the change in the definition of net turnover as a result of an amendment to the Accounting Act and the impact of this change on an appendix to the income tax return. The Ministry of Finance considers the procedure under Section 4(7) of the decree, i.e., not disclosing the net turnover for the previous accounting period in the income statement in the financial statements for 2024, to be justified and at the same time the best solution. Therefore, it has been made possible not to include this information in the appendix to the corporate income tax return without the EPO application issuing an error message. The tax administrator's information system has been similarly adapted.
- In its communication, the Ministry of Labour and Social Affairs reminds that from January, maternity allowances have been paid automatically based on an electronic certificate of the date of birth issued by a doctor. In addition, clients can process more applications from home thanks to the ePortal of the Czech Social Security Administration (CSSA). It is already possible to apply for a pension online, and from January the CSSA is moving to a fully digital form of communication between treating doctors, employers and insured persons for sickness insurance allowances. Further sickness insurance allowances are thus being digitised. More information can be found here.
FOREIGN NEWS
Developments in Pillar 1
- The OECD has advanced negotiations on the Multilateral Convention (MLC), which will introduce the redistribution of profits of multinational companies (Amount A). Although the text of the MLC has received broad support, discussions about Amount B, intended to standardise the transfer prices of routine distribution and marketing activities in the country of sale, are still ongoing. For some countries, concerns remain about the appropriateness of the profit margins set. The OECD is considering a compromise that would apply Amount B only to smaller distributors, while larger ones would be subject to individual assessment.
Developments in Pillar 2 (minimum tax)
- Cyprus, Spain, and Gibraltar have adopted implementing laws for Pillar 2.
- Italy has issued ministerial decrees on the application of transitional safe harbours and tax allocation under blended CFC tax regimes.
- We summarise the developments at OECD level in a separate article.
Under the new US administration, commitments negotiated under global tax agreements are not binding on the US without Congressional approval. The US will also assess whether any countries are violating tax treaties with the US or implementing tax rules that harm US companies (e.g., certain aspects of the global minimum tax or unilateral digital taxes), which could lead to the application of double taxation or trade measures against persons from those countries.
The KPMG EU Tax Center regularly monitors changes in direct taxes in the EU and internationally. For a complete overview of the latest news, please see their latest issue.