News in Brief, February 2022
Last month’s tax and legal news in a few sentences.
1 February 2022 In brief
DOMESTIC NEWS IN BRIEF
- Instruction No. GFD-D-52 on decision-making in respect of applications for the waiver of levies for the breach of budgetary discipline and penalties for the late payment of levies for the breach of budgetary discipline submitted pursuant to Act No. 250/2000 Coll., on budgetary rules of territorial budgets, as amended, was published in Financial Bulletin No. 2/2022.
- The following were published in Financial Bulletin No. 3/2022:
- a list of countries exchanging country-by-country reports pursuant to Section 13 zb (2) of Act No. 164/2013 Coll., on International Cooperation in Tax Administration
- Instruction No. GFD-D-53 on determination of levies for the breach of budgetary discipline
- an annex to Instruction No. GFD-D-53 on determination of levies for the breach of budgetary discipline.
- In 2021, EU member states joined the OECD's global two-pillar agreement to reform the system of income taxation of multinational enterprises. At the January ECOFIN meeting, the Czech Republic showed its support for the adoption of Pillar I (changing taxing rights for corporate groups generating profits of over EUR 10 billion) and Pillar II (introducing a minimum global effective tax for corporate groups with a worldwide turnover of more than EUR 750 million) from 2023.
FOREIGN NEWS IN BRIEF
- The updated OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations were published on 20 January 2022. Compared with the 2017 edition, the January 2022 version includes revised guidance on the application of the transactional profit split method and guidance for tax administrations on the application of the approach to hard-to-value intangibles, as well as new transfer pricing guidance on financial transactions approved in 2020. This edition aims to harmonise the individual guidelines issued so far in one coherent and comprehensive document. Changes to already established interpretations have not been indicated or highlighted but cannot be ruled out.
- With effect from January 2022, Slovakia has extended the CFC rules to natural persons who should tax the profit of qualifying controlled persons. The controlled company is understood to be a legal entity over which a natural person, a Slovak tax resident, exercises control or holds a 10% stake in such an entity. Companies resident in non-cooperative jurisdictions will be considered controlled companies automatically; in all other cases, companies with effective taxation below 10% will also be considered controlled companies. The profits of controlled companies will be taxed at the natural person’s level at 25%, or 35% if a controlled company from a non-cooperative jurisdiction is involved.