News in brief, February 2021

DOMESTIC NEWS IN BRIEF

• The Chamber of Deputies passed an amendment to the Act on Income Tax in the wording returned by the Senate (technical adjustments), temporarily increasing the limit for deducting gits and donations to 30% of the tax base for the 2020 and 2021 taxable periods (natural persons) and for the taxable period ended in the period from 1 March 2020 to 28 February 2022 (legal persons). The amendment will enter into effect after its promulgation in the Collection of Laws.
• Parts of LEX COVID relating to legal persons have been amended (No. 191/2020 Coll.). The deadline during which legal persons may decide per rollam (decision-making outside general meetings carried out in writing or through technical tools) even if their founding acts do not permit so have been extended until 30 June 2021 irrespective of the duration of emergency measures associated with the pandemic.
• The Ministry of Finance announced that the Czech Republic signed a double taxation treaty with San Marino on 27 January 2021 in Rome. Standard legislative processes to ratify the treaty and subsequently implement it into practice will follow in both countries. The ministry also informed that a double taxation treaty with Bangladesh entered into effect on 15 January 2021. Owing to a difference in taxable periods, the treaty will become effective in Bangladesh on 1 July 2021 and in the Czech Republic on 1 January 2022.
• An updated list of double taxation treaties in effect in the Czech Republic is available at the ministry of finance’s website. New treaty countries are Botswana, Ghana and Kyrgyzstan.
• Financial Bulletin No. 7/2021 provides the following information:
  • A list of types of taxes and parts thereof for which the tax authorities keep personal tax accounts and collect payments from taxable entities using appropriate bank accounts (the Ministry of Finance’s reporting duty pursuant to Section 149(3) of Act No. 280/2009 Coll., the Tax Procedure Code, as amended).
  • How to correctly pay tax to the tax authority in 2021.
• The GFD issued information on under what circumstances taxpayers are entitled to claim income tax credit for the electronic reporting of sales while reporting is suspended.
• The Minister of Finance’s Decision on the Waiver of Income Tax Due to an Extraordinary Event published in Financial Bulletin No. 5/2021 waives income tax on remuneration paid to students for the performance of work under the Crisis Act.
• Changes originating from amendments to the VAT Act and the Tax Procedure Code entered into effect on 1 January 2021; as a result, the following documents have been updated:  GFD’s information on the registration for VAT as amended by Amendment No. 2 and GFD’s information for persons liable to tax not established in the CR (VAT registration and other selected tax duties) as amended by Amendment No. 1. 
• The General Customs Directorate draws the attention of exporters, hauliers and logistic companies to a growing number of problems with confirmations of goods leaving France for Great Britain accompanied by domestic export declarations, as some French exit customs offices do not send confirmations of the goods exiting the EU to the Czech Republic. 
• Following the effectiveness of an amendment to the Tax Procedure Code, the customs administration draws attention to the regulation of tax assertion filings, as only filings via prescribed XML structure forms shall be admissible.
• The customs administration published the full wording of its information on changes to rates and designation of selected products stated in tax returns.
• The Ministry of Justice disclosed an overview of changes to laws in 2021 including, e.g., changes to insolvency regulations, new rules on experts and interpreters (translators), and an amendment to the Act on Corporations and other relevant laws.
• The ministry also informs about the status of debating an act on the registration of beneficial owners with planned effectiveness in the first half of 2021.

FOREIGN NEWS IN BRIEF

• In light of the ongoing COVID-19 pandemic the OECD has released its updated guidance analysing the impact of the COVID-19 crisis on the interpretation of international tax treaty provisions concerning the creation of permanent establishments, changes in tax residence for entities and individuals, as well as income from employment.
• The European Commission has released a roadmap for the introduction of an EU digital levy. The roadmap is open for public consultation until 12 April 2021. The plan does not clarify how it relates to the directive on digital services tax or to other similar taxes implemented unilaterally by individual member states. The digital levy should represent income for the EU budget and should comply with double taxation treaties and conclusions of negotiations at the OECD level regarding changes to the taxation of digital economy. These negotiations are planned to be completed by mid-2021.