Tax and legal news

At the end of 2020, the OECD published a guidance note on the transfer pricing implications of the COVID-19 pandemic. The goal of the guidance note was to clarify how the “arm’s-length” principle and the OECD Directive on transfer pricing should be applied to problems related to the COVID-19 pandemic.

We have informed you previously that directive no. 2018/822/EU – the so-called “DAC 6” – imposes a new duty on intermediaries and taxpayers to notify the local authorities about their cross-border arrangements. Given the fact that the notification duty may be satisfied in various ways in the various EU countries, and in view of the fact that not meeting this duty may lead to strict sanctions, we recommend that you thoroughly examine and understand your notification duty in this respect.

The president signed a bill in January 2021 which increases temporarily the limit for deducting donations as a deductible item from the tax base.

The changes include a new limit for classification as a tangible asset for the purpose of the Icome Tax Act (CZK 80,000), elimination of the tax depreciation of intangible assets and introduces the extraordinary depreciation of tangible assets classified in the first and second depreciation groups.

Meal voucher allowance can be provided to employees in addition to the existing corporate catering or paper meal vouchers.

The amendment to the Income Tax Act, effective from 1 January 2021, introduced progressive taxation with rates of 15 per cent and 23 per cent and also eliminated the super-gross salary.