KPMG’s Tax and Legal Forum: Karel Šimka’s comments on SAC case law re ‘Svarc’ system and transfer pricing
The participants in the recent Tax and Legal Forum were given a behind-the-scenes look at the decision-making and functioning of the Supreme Administrative Court (SAC) by its president, Karel Šimka. We bring you part of the interview with him…
SAC on conditions for depreciation of technical improvements to real estate
The Supreme Administrative Court (SAC) has addressed under what conditions building alterations to real estate can be considered technical improvements eligible for tax-deductible depreciation. The court concluded that depreciation can only be…
Burden of proof when changing valuation of internally produced inventories
A recent ruling by the Supreme Administrative Court (SAC) dealt with proving a change in an accounting method regarding valuation of internally produced inventories, and its impact on the tax base. The ruling provides important conclusions for…
SAC rules on right to deduct VAT on fixed service fee
According to the Supreme Administrative Court (SAC), it is possible to claim a VAT deduction also for received services that were invoiced at a fixed monthly fee. The fact that the fee was agreed in this manner is not a fundamental obstacle to…
How to correctly treat building land from VAT perspective
The issue of VAT on the sale of real estate, especially land, often causes confusion and leads to different interpretations. A recent ruling by the Supreme Administrative Court (SAC) provides guidance on how to determine whether the sale of land is…
SAC: application of double tax treaty to sale of domestic real estate business share
The Supreme Administrative Court (SAC) ruled that a Cypriot company’s income from the sale of a business share in a Czech company whose value consisted in more than 90 percent of real estate is subject to taxation in the Czech Republic.
SAC rules on tax non-deductibility of interest on intra-group financing
In its August 2025 judgement, the Supreme Administrative Court (SAC) revisited the non-deductibility of interest expenses on a loan that arose in the context of a corporate group's internal restructuring. The court assessed the taxation of interest…
SAC: tax deductibility of advertising and promotion costs
Companies must be able to prove that their advertising and promotion costs were actually incurred in connection with generating, securing and maintaining taxable income. This basic rule for the tax deductibility of costs has yet again been confirmed…
SAC’s Grand Chamber clarifies formal requirements for power of attorney
The Grand Chamber of the Supreme Administrative Court has clarified certain aspects of granting a power of attorney for representation in proceedings before state authorities. The SAC pointed out that there are no stricter requirements for the…
SAC: advertising services and the right to deduct VAT
In judgment 8 Afs 111/2022–36, the Supreme Administrative Court (SAC) assessed how far a taxpayer had discharged their burden of proof in a case involving received advertising services that were to be rendered within motorcycle races, among other…
Application of time test to proceeds from sale of former cooperative apartment
If you intend to sell an apartment that had been in cooperative ownership (owned by a housing cooperative in which you were a member) before you became its owner, beware of calculating the time test: the period of time of the membership in the…
SAC once again restrains tax administrators from collecting tax, cost what it may
The Supreme Administrative Court has published a long-awaited judgment in the case of the pharmaceutical company ELI LILLY ČR, s.r.o., which concerned the invoicing of marketing and distribution costs. The company sought to achieve minimum…