Act No. 305 / 2017 Coll.
Act amending Act No. 164 / 2013 Coll., on International Cooperation in Tax Administration and on the Amendment of Other Related Laws, as amended
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Effective from 19.09.2017
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19.09.2017
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305
THE LAW
of 16 August 2017
amending Act No. 164 / 2013 Coll., on International Cooperation in Tax Management and on the Amendment of Other Related Laws, as amended
Parliament has decided on this law of the Czech Republic:
Act No. 164 / 2013 Coll., on International Cooperation in Tax Administration and on the Amendment of Other Related Laws, as amended by Senate Law Act No. 344 / 2013 Coll., Act No. 105 / 2016 Coll., Act No. 188 / 2016 Coll. and Act No. 92 / 2017 Coll., is amended as follows:
1. In footnote 1, "and Council Directive (EU) 2015 / 2376 'is replaced by", Council Directive (EU) 2015 / 2376 and Council Directive (EU) 2016 / 881'.
2. In Article 1 (5), the word "or 'shall be added at the end of point (a).
3. In Paragraph 1 (5), the word "or 'shall be replaced by a dot and point (c) shall be deleted at the end of point (b).
4. in Article 2 (1) (a), the comma shall be deleted;
5. In Article 6 (3), the words "on their website 'are replaced by the words" in a way that allows remote access'.
6. Paragraph 8 (2) reads as follows:
"(2) The tax administrator shall be the Specialised Financial Office, if it is about the automatic exchange of information notified by:
(a) financial institutions; or
(b) multinational enterprise groups. "
7. in Article 12b (1), at the end of point (c), the dot is replaced by a comma and the following point (d) is added:
"(d) notified by multinational enterprise groups."
8. In Paragraph 13b (2), the words "in a way that allows remote access' are replaced by the words" in the Financial Rapporteur '.
9. in Article 13d (3), the words "applying a common standard for notification" shall be added at the end of the text of point (b).
10. in Article 13e (3) (c), the words "on the basis of which the information notified by financial institutions may be exchanged" shall be replaced by "applicable to the automatic exchange of information notified by financial institutions."
11. in Article 13e, the following paragraph 4 is inserted after paragraph 3:
"(4) A Participating State applying a common notification standard shall mean:
(a) another Member State;
(b) a Contracting State with which the Czech Republic has concluded an international agreement on the basis of which information notified by financial institutions may be automatically exchanged with that State at least to the extent that it is obliged to provide such information by another Member State, provided that:
1. to implement this international agreement, the competent authority of the Czech Republic, as well as the competent authority of this Contracting State, has signed a document concerning the automatic exchange of information notified by financial institutions and it is likely that the conditions for the exchange between the Czech Republic and that State are met; or
2. the signature of the document referred to in point 1 is not necessary for the automatic exchange of information notified by financial institutions under this international agreement; or
(c) a Contracting State with which the European Union has concluded an international agreement applicable to the automatic exchange of information notified by financial institutions to at least the extent that it is obliged to provide such information by another Member State and which is included in a list published by the European Commission. ';
Paragraphs 4 to 6 shall be renumbered paragraphs 5 to 7.
12. in Article 13e (7), "3" is replaced by "4" and the words "and published in the Financial Rapporteur at the end of the text of the paragraph; in the Financial Rapporteur, the date from which that State is a participating State applying a common notification standard shall also be indicated for each Contracting State. ';
13. In Section 13f, the words "procedural position 'are replaced by" Status'.
14. in Article 13f, the word "procedural" shall be deleted;
15. in Article 13g (5), the words "in a way that allows remote access" shall be replaced by "in the Financial Rapporteur."
16. in Article 13k (1) (e), the words "or, if" shall be replaced by "or, if" and after "cancellation," the words "and, where provided for by an international agreement, the balance thereof or its value immediately before its cancellation" shall be inserted;
17. in Article 13m (2), the words "the tax administrator" shall be replaced by the words "the central liaison body";
18. in Paragraph 13p (2), the words "in a way that allows remote access" shall be replaced by "in the Financial Rapporteur."
19. After Paragraph 13t, the following Section 13ta is inserted:
Communication of choice made by the competent authority
The Ministry will publish in the Financial Rapporteur a communication on the choice made by the competent authority of the Czech Republic in accordance with the international agreement. '
20. in Part One, Title III, Part 2, the following Section 5 is inserted after Section 4:
Automatic exchange of information notified by multinational enterprise groups
Preliminary provisions
In the automatic exchange of information notified by multinational enterprise groups, reports shall be provided by country containing some summary information on the multinational enterprise group and information on individual members of that group provided by the tax authorities of the Czech member entities of that group.
State exchanging reports by country
(1) A country-by-country reporting State means:
(a) another Member State; or
(b) a Contracting State whose competent authority has signed, as well as the competent authority of the Czech Republic, a document implementing an international agreement concerning the automatic exchange of information notified by multinational groups of undertakings, provided that the conditions for exchange between the Czech Republic and that State are satisfied.
(2) The Ministry shall publish in the Financial Rapporteur the list of States referred to in paragraph 1 (b).
Group of undertakings, consolidated financial statements and reporting periods
(1) The group of undertakings consists of legal persons or units without legal personality for which:
(a) consolidated accounts of a group of undertakings are required; or
(b) the consolidated financial statements of a group of undertakings would be required if shares or similar securities representing a share in one of those legal entities or entities without a legal personality were traded on a regulated market, including a similar market abroad.
(2) The consolidated financial statements of a group of undertakings shall mean consolidated financial statements drawn up in accordance with the accounting rules or principles generally applied in the State or jurisdiction in which the parent entity of that group is subject to taxation because of its registered office or place of management.
(3) The reporting financial year shall be the financial year for which the consolidated financial statements of the group of undertakings referred to in paragraph 2 are drawn up or for which, pursuant to paragraph 1 (b), it would be compulsory to be drawn up.
Transnational enterprise group
(1) Transnational enterprise group means a group of undertakings comprising:
(a) legal persons or entities without a legal personality which are subject to taxation because of their registered office or place of management in different States or jurisdictions; or
(b) a legal person or a entity without a legal personality which, in addition to taxation on grounds of its registered office or place of management, is subject to taxation in respect of an activity carried out through a permanent establishment in a different State or jurisdiction.
(2) The group of undertakings shall not be a multinational group of undertakings referred to in paragraph 1 in the reporting financial year, provided that its total consolidated returns shown in the consolidated financial statements of that group for the reporting financial year immediately prior to that reporting financial year are less than EUR 750 000 000 or the corresponding amount in the currency in which those accounts are drawn up, converted according to the average of the exchange rates published by the European Central Bank for January 2015.
Member entity
(1) A member entity of a multinational group of undertakings is a separate entity that is:
(a) included in or included in the consolidated financial statements of that group if shares or similar securities representing a share in that unit were traded on a regulated market, including the like market abroad; or
(b) excluded by reason of its size or significance from the consolidated accounts of that group.
(2) A member entity of a multinational group of undertakings from a State or jurisdiction is a member entity of that group which is subject to taxation in that State or jurisdiction because of its registered office or place of management.
(3) A European member entity of a multinational group of undertakings means a member entity of that group from a Member State of the European Union.
(4) The Czech member entity of a multinational group of enterprises is the member entity of this group from the Czech Republic.
Status of Czech member body
For the purposes of this Act, the Czech member entity of a multinational group of enterprises has the status of a tax entity.
The highest parent entity, representing the parent entity and representing the European entity
(1) The highest parent body of a multinational group of undertakings is the member body of that group where:
(a) directly or indirectly participate in the capital or voting rights of another member entity of that group to the extent sufficient to:
1. is obliged to draw up the consolidated financial statements of the group; or
2. it would have to be compiled if its shares or similar securities had been traded on a regulated market, including the like market abroad, in its State or jurisdiction; and
(b) no other member entity of this group shall directly or indirectly participate in the capital or voting rights of that entity to such an extent as is required under (a).
(2) The representative parent entity of a multinational group of undertakings shall be the member entity of that group which has been notified by any member entity of that group as the sole representative of that group's highest parent entity, which shall report for that group by country in accordance with the decision of that group.
(3) The representative European entity of a multinational group of undertakings shall mean the European member entity of that group, which has been reported by any European member entity of that group as the European member entity of that group, which, in accordance with the decision of that group, shall report by country for that group for all European member entities of that group.
(4) The representative body of a multinational group of undertakings shall mean the representative parent entity of that group and the representative European entity of that group.
System failure of the country-by-country reporting state
(1) A country-by-country system failure of the reporting State is understood to mean that:
(a) that State has suspended the automatic exchange of information notified by multinational groups of undertakings for reasons other than those specified in the document implementing the international agreement concerning the automatic exchange of information notified by multinational groups of undertakings, signed by the competent authorities; or
(b) the State fails to fulfil its obligation to report automatically by country on behalf of multinational groups of enterprises to which the Czech member entities belong.
(2) The Ministry will publish in the Financial Rapporteur that there has been a systemic failure by country of the State exchanging the report or that this situation has passed.
Report by country
(1) The report by country for the multinational enterprise group contains:
(a) summary information on this group in relation to each State or jurisdiction to the following extent:
1. income, except payments between the member entities of the group, which are considered to be dividends in the State or jurisdiction from which the member entity providing the payment is,
2. the pre-tax result,
3. income tax paid,
4. Income tax due,
5. capital;
6. cumulative profit or loss,
7. number of employees;
8. Value of tangible assets other than cash or cash equivalents;
(b) information on the individual members of this group to the following extent:
1. name of entity,
2. the State or jurisdiction of which the entity is,
3. the State or jurisdiction under whose law the entity was established if it differs from the State or jurisdiction referred to in point 2; and
4. the nature of the principal business or other principal activity of the entity;
(c) the source of the data referred to in (a).
(2) The report by country for the multinational group of undertakings shall be drawn up for the reporting financial years, broken down by country or jurisdiction, and shall include a currency designation in which the amounts indicated in the report are expressed; all amounts shall be denominated in the same currency.
(3) Data from the same source shall be used when compiling the report by country. The use of a divergent data source than in the previous reporting financial year must be justified in the report.
(4) For the purpose of drawing up a report by country, a member entity of a multinational group of undertakings shall also be considered to be a member entity of that group through which that entity operates in a permanent establishment within the territory of a State or jurisdiction in which that entity is not subject to taxation on the grounds of its registered office or place of management, provided that that entity draws up for that part a separate financial statement for financial reporting purposes, regulatory purposes, tax reporting purposes or internal management and control purposes.
(5) The Ministry sets out by decree the model of the report by country and the guidelines for its completion.
A request for synergies addressed to the highest parent entity
The Czech member entity of a multinational enterprise group that notifies and is not the highest parent entity of that group is obliged to request that the highest parent entity to provide all the information necessary to fulfil the obligation to report by country for that group.
Storage of documents
Czech member entity of a multinational group of enterprises is required to keep documents for 10 years from the end of the reporting financial year
(a) used in drawing up the report by country for that group;
(b) concerning the fulfilment of an obligation to cooperate with the group's highest parent body.
Notification
(1) The Czech member entity of a multinational group of enterprises, which is the largest parent entity of that group, shall submit a notification to the tax administrator containing a country-by-country report for that group.
(2) The Czech member entity of a multinational group of enterprises, which is not the highest parent entity of that group, shall submit to the tax administrator a notification containing a country-by-country report for that group if the highest parent entity of that group:
(a) it is not from a Member State of the European Union and one of the following conditions is met:
1. this highest parent entity is not required to report by country in its State or jurisdiction; or
2. for the reporting period, the State or jurisdiction of the highest parent entity of that group is not a country-by-country reporting State; or
(b) it is from the State exchanging the report by country that has failed systemically and the Ministry has made this system failure public.
(3) A Czech member entity of a multinational group of undertakings shall not be obliged to make the notification referred to in paragraph 2 if it has submitted a country-by-country report through the representative body of that group; and
(a) the representative body is from a Member State of the European Union; or
(b) the following conditions are met:
1. for the reporting period, the representative entity of that group is from the country-by-country reporting state;
2. the representing entity is obliged in that State to report by country,
3. this state has not communicated to the Czech Republic a systemic failure,
4. the representing entity has reported to its State at the latest on the last day of the reporting financial year that it is representing that group; and
5. the Czech member body stated in the announcement that the representative entity will report on behalf of the group by country.
(4) The provisions of paragraph 3 shall not apply where the representative entity of a multinational group of undertakings is from the reporting State by country that has failed systemically and the Ministry has disclosed that system failure.
Time limit for submission of notifications
(1) The notification shall be made within 12 months of the end of the reporting financial year of the multinational group of undertakings.
(2) In the event of a systemic failure by the country of the country from which the parent entity of the multinational group of undertakings or representing the entity of that group is the highest parent entity, the period referred to in paragraph 1 shall not end more than 3 months from the date on which the Ministry published the system failure.
Notification
(1) The Czech member entity of a multinational group of enterprises shall submit a declaration to the tax administrator indicating:
(a) the information necessary for the technical security of the notification where that entity is obliged to notify the tax administrator;
(b) the ultimate parent entity of that group and its State or jurisdiction;
(c) where the Czech member entity is not the highest parent entity of that group, an indication of whether it is representing the parent entity of that group or representing the European entity of that group; or
(d) where this Czech member entity is not a member entity under (b) or (c), an indication of that,
1. which member entity of this group shall report by country for that group and its State or jurisdiction; or
2. that it itself shall report by country for this group.
(2) The notification referred to in paragraph 1 shall be submitted at the latest by the end of the first reporting financial year.
(3) The tax administrator shall determine the information necessary for the technical security of the notification referred to in paragraph 1 (a) and publish it on the official plate and in a way that allows remote access.
(4) If the data referred to in paragraph 1 are changed, the Czech member entity of the multinational group of undertakings shall report the change to the tax administrator within 15 days of the date on which it occurred.
Notification and notification procedure
(1) Notifications and notifications shall be made on a form issued by the Ministry and shall be made by means of a data report:
(a) signed by a recognised electronic signature; or
(b) with a certified identity of the feeder in a way that can be logged into his data box.
(2) The format and structure of the data report shall be made public by the central liaison body in a way that allows remote access.
Fines
(1) The tax administrator may also impose a fine on the Czech member entity of a multinational group of undertakings for failure to fulfil obligations of a non-monetary nature if it infringes the obligation
(a) keep the documents;
(b) request the highest parent entity of this group to cooperate.
(2) The tax administrator may impose an order fine of up to CZK 1 500 000 on the Czech member entity of a multinational group of enterprises, which is the highest parent entity of this group, if it violates the obligation to notify.
(3) The tax administrator may impose an order fine of up to CZK 1 500 000 on the Czech member entity of a multinational group of enterprises representing that group if it infringes the obligation to notify.
(4) The tax administrator may impose an order fine on the Czech member entity of a multinational group of enterprises up to CZK 600,000 if it violates the obligation to notify.
(5) The order fine referred to in paragraph 4 may not be imposed on a Czech member entity of a multinational enterprise group which:
(a) it proves that it has not received or obtained the information necessary to fulfil the obligation to report by country for that group which it has requested to provide;
(b) indicate in the report by country for that group all information available to it and received or received; and
(c) indicate in the notification that the group's highest parent refused to cooperate.
Procedure of the Central Contact Authority
(1) The central liaison body shall transmit the country-by-country report for the multinational group of enterprises to the contact point of the State or jurisdiction from which the member entity of that group is listed in that report and which, for the reporting period, was the country-by-country reporting State. The report by country for a multinational group of undertakings shall also be transmitted to the contact point of the State or jurisdiction in whose territory a part of the member entity of that group referred to in the report operates in a permanent establishment, provided that that State or jurisdiction was, for the reporting period, a country-by-country reporting State.
(2) The report by country for the multinational group of undertakings shall be transmitted within 15 months of the end of the reporting financial year of that group. In the event that the time limit for the submission of notifications ends later, the central liaison body shall transmit the country-by-country report for that group without delay.
(3) The central liaison body shall forward to the contact points of all other Member States information that the highest parent entity of a multinational group of enterprises has refused to provide synergies to the Czech member entity of that group. '
21. In Annex 2, in Section V, Article C, the word "one 'is replaced by" one'.
22. In Annex No 2, the words "applying a common notification standard 'shall be added to Section V (D) (2) and Section VI (2) at the end of the text in point (a).
Transitional provisions
1. The notification provided for in Article 13zl (1) of Act No. 164 / 2013 Coll., as effective from the date of entry into force of this Act, is not submitted by the Czech member entity of the multinational group of enterprises, which is the largest parent entity of that group, for the reporting financial years beginning before 1 January 2016.
2. The notification provided for in Article 13zl (2) of Act No. 164 / 2013 Coll., as effective from the date of entry into force of this Act, is not submitted by the Czech member entity of a multinational group of enterprises, which is not the largest parent entity of that group, for reported financial years beginning before
(a) 1 January 2016 in the case of the representative parent entity of that group;
(b) 1 January 2017 in other cases.
3. The notification pursuant to § 13zn of Act No. 164 / 2013 Coll., as effective from the date of entry into force of this Act, for the reporting period referred to in point 1 or 2, which ends by 31 October 2017, shall be submitted by 31 October 2017.
4. The central liaison body shall transmit the report by country for the multinational group of enterprises for the reporting financial year starting in 2016 within 18 months from the end of that period.
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Regulation Information
| Citation | Act No. 305 / 2017 Coll., amending Act No. 164 / 2013 Coll., on International cooperation in tax administration and amending other related laws, as amended |
|---|---|
| Regulation Type | Law |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 19.09.2017 |
|---|---|
| Effective from | 19.09.2017 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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