Digital Operational Resilience Act (DORA) comes into force

In February this year, the tax world saw the light of a new, slightly revised and updated instruction of the tax administration on the projection of tax accessories. At the outset, it should be noted that it does not bring a revolutionary change in the tax administrator's approach to this issue. As will be shown below, in some cases it expands the existing possibilities of remission, while in other cases it tightens the conditions for possible remission of tax accessories.  

On 28 February, the Supreme Administrative Court issued a decision 7 Afs 31/2024, by which it dismissed the appeal of the Financial Directorate of Appeal against the decision of the Regional Court in the case of an additional corporate income tax assessment based on the results of a tax audit focused on transfer prices.  

On 11 March 2025, the EU Council formally adopted the "VAT in the digital age" package. The acronym ViDA (VAT in the digital age) has become common for this initiative. The changes will be gradually implemented in the national legislations of EU Member States over the coming years.  

The approach to finance leasing from a VAT perspective has changed significantly in recent years. As of 1 January 2021, the popular operating lease contracts, especially for cars, which allowed the purchase of the vehicle at the end of the contract for a symbolic price of CZK 1,000, will almost cease to appear. The CJEU, which interprets and unifies VAT concepts, has concluded that if the use of this option is the only economically reasonable option, it is a finance lease. Who wouldn't buy a car for a thousand after five years, right?  

The abolition of the real estate acquisition tax from 2020 has freed up and changed the market for real estate transactions. Until then, purchases of lucrative real estate between entrepreneurs were structured mainly as the purchase of shares in property companies (i.e. companies that own real estate), the so-called share deal. The abolition of the real estate acquisition tax opened up the space for direct real estate purchases, the so-called asset deal. Let's summarise the advantages and disadvantages of both options. The starting point for further consideration will be a situation where an SRO has held a lucrative property (let's call it a Real Estate SRO - hereafter referred to as SRO) in its fixed assets for 20 years, leases the property, and does not develop any other activity.  

Since August last year, a legislative package containing an amendment to the Accounting Act has been tabled in the Chamber of Deputies. While the amendments to the Accounting Act and the Auditors Act are important, this article focuses on the extensive amendment to the Matching Taxes Act that is part of this package. The approval of this amendment is eagerly awaited not only by accounting entities but also by the companies affected by the equalisation taxes. On 13 February 2025, this legislation passed its first reading in an extraordinary session of the Chamber of Deputies.  

We would like to remind taxpayers that the deadline for reporting exempt personal income for the year 2024 is approaching, if the amount exceeded CZK 5 million. CZK. This fact must be notified to the tax administrator no later than the deadline for filing the tax return for the tax year in which the income was received.