What is Act No. 80 / 2019 Coll.?

Act No. 80 / 2019 Coll., amending certain tax laws and certain other laws — Law amending certain tax laws and certain other laws.

When it became Act No. 80 / 2019 Coll. effectiveness?

Act No. 80 / 2019 Coll. became effective 01.04.2019.

Is Act No. 80 / 2019 Coll. still valid?

Yes, Act No. 80 / 2019 Coll. is still valid and effective.

How many times was it Act No. 80 / 2019 Coll. amended?

Act No. 80 / 2019 Coll. has 5 time versions of the text.

Act No. 80 / 2019 Coll. - Law amending certain tax laws and certai...

80

THE LAW

of 12 March 2019

amending certain tax laws and certain other laws

Parliament has decided on this law of the Czech Republic:

ČÁST PRVNÍ

Amendment of the Income Tax Act

Čl. I

Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 1999, Act No. 5 / 2004, Act No. 5 / 1999, Act No. 5 / 2004, Act No. 5, Act No. 6 / 1999, Act No. 5, Act No. 5, Act No. 96, Act No. 5 / 1999, Act No. 96, Act No. 5, Act No. 96, Act No. 5, Act No. 5 / 2004, Act No. 5, Act No. 2004, Act No. 2004, Act No. 6, Act No. 2004, Act No. 2004, Act No. 1999, Act No. 2004, Act No. 2004, Act No. 5, Act No. 2004, Act No. 2004, No.

1. At the end of footnote 137, the sentence "Council Directive 2016 / 1164 / EU of 12 July 2016 laying down rules against tax avoidance practices directly affecting the functioning of the internal market, as amended by Council Directive 2017 / 952 / EU, is added to the separate line. '.

2. in Paragraph 6 (4) (b), the amount "CZK 2,500" is replaced by the words "decide to participate in sickness insurance."

3. In § 7 (7) (a) the amount "800 000 CZK" is replaced by "1 600 000 CZK."

4. In Article 7 (7) (b), "CZK 600,000 'is replaced by" CZK 1 200 000'.

5. In § 7 (7) (c), the amount "300 000 CZK" is replaced by "600 000 CZK."

6. In § 7 (7) (d), the amount "400 000 CZK" is replaced by "800 000 CZK."

7. In Article 8 (4), the words "and (i) 'shall be inserted after the words" (a) to (d)'.

8. In the first sentence of Paragraph 9 (4), "CZK 300,000" is replaced by "CZK 600,000."

9. In Paragraph 22 (1) (g), the words "and from the profits of the family fund 'shall be added at the end of point 3.

10. in § 22 (1) (g) (7):

"7. income from the sale of investment vehicles under the law governing the capital market business and property rights registered in the Czech Republic not listed under points (h) and (j),"

11. in Paragraph 22 (1) (g), the words "and from family funding" shall be added at the end of the text of point 13.

12. In Paragraph 22, the dot is replaced by a comma at the end of paragraph 1 and the following point (j) is added:

"(j) income from the sale of movable property in the commercial property of a permanent establishment and income from the transfer of property without any change of ownership from the Czech Republic to abroad."

13. in Article 23 (9) (a), the words "tribal lists" shall be deleted;

14. In Article 23, the following paragraph 19 is added:

"(19) The result of the taxpayer's economic performance, which, on the basis of the accounting legislation, has used the option of valuing the financial instrument at fair value in equity without affecting the outcome of the financial instrument, shall be adjusted in the course of the implementation of that financial instrument by an amount corresponding to changes in equity related to that financial instrument from its acquisition to its realisation, provided that they have not affected the taxable amount; This does not apply to a financial instrument for which the income from its transfer would be exempt. ';

15. In Section 23, paragraph 20 is added, including footnote 140:

"(20) In cases where a taxpayer, on the basis of accounting legislation, follows a directly applicable European Union law governing the financial reporting of leases (140), the result of the management would have been established if the taxpayer had followed the accounting legislation effective before 1 January 2018.

140) Commission Regulation (EC) No 2017 / 1986 of 31 October 2017 amending Regulation (EC) No 1126 / 2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606 / 2002 of the European Parliament and of the Council as regards International Financial Reporting Standard 16. '

16. in Article 23d, paragraph 2 is deleted;

Paragraphs 3 to 6 shall become paragraphs 2 to 5.

17. in Article 23d (2):

"(2) Paragraphs 23a (2), 23a (5) (b) and (c), 23b (5) and 23c (8) (b) and (c) shall not apply where the transfer of the business establishment by the receiving commercial corporation, the merger by the commercial corporation or the division by the commercial corporation of the business corporation which has been acquired by the commercial corporation for more than 12 months prior to the transfer of the business establishment, the starting date of the merger or division in fact has not taken place. This shall not apply where the taxpayer concerned proves that there are proper economic reasons for the transfer of a business establishment, the merger of commercial corporations or the division of a trading corporation. ';

18. In Section 23d, at the end of paragraphs 3 and 4, the following sentence is added: "This shall not apply if the taxpayer concerned proves that there are proper economic reasons for such a transfer of shares. '

19. The following Sections 23e to 23h are inserted after Section 23d:

„§ 23e

Restrictions on the eligibility of excessive borrowing expenditure

(1) The result of the management or the difference between income and expenditure of the corporation tax payer shall be increased by an amount corresponding to the positive difference between excessive borrowing expenditure and the limit on the eligibility of excessive borrowing expenditure, which is higher than that of the amounts:

(a) 30% of the tax profit before interest, taxation and depreciation; or

b) 80 000 000 CZK.

(2) Excessive borrowing expenditure for income tax purposes means borrowing expenditure incurred to achieve, secure and maintain taxable income after deduction of taxable borrowing income for the tax period or period for which tax returns are made.

(3) Borrowing expenditure for income tax purposes means:

(a) financial expenditure;

(b) expenditure which, by its nature, constitutes a performance for the provision of a financial instrument, regardless of the obligation arising from such a performance;

(c) notional interest on the derivative;

(d) expenditure related to a derivative contracted to ensure the risk related to the commitment referred to in points (a) to (c);

(e) expenditure in the form of an exchange-rate difference relating to the commitment referred to in points (a) to (d);

(f) the interest included in the remuneration on the basis of an obligation to transfer the property to use the property with the right to purchase the property subsequently by a party to the obligation;

(g) interest forming part of the valuation of assets under accounting legislation;

(h) expenditure similar to that referred to in points (a) to (g).

(4) For the purposes of income taxes, borrowing income shall mean income in the form of interest on the credit instrument and similar income from the title referred to in paragraph 3.

(5) A tax gain before interest, taxation and depreciation for the purposes of income taxes is understood as the aggregate for the tax period or the period for which the return is made,

(a) the result of the management or the difference between revenue and expenditure provided for in this Act, with the exception of the adjustment resulting from the limitation of the eligibility of excessive borrowing costs;

(b) the tax bases levied by withholding at a specific tax rate;

(c) a separate tax base taxed at the tax rate pursuant to Article 21 (4);

(d) depreciation of assets used as expenses incurred to obtain, secure and maintain taxable income;

(e) the positive valuation difference when buying a business establishment or the positive difference between the valuation of the business establishment acquired by the purchase and the sum of its individually revalued components of assets, less the debt received, used as an expense to achieve, secure and maintain taxable income; and

(f) excessive borrowing expenditure.

(6) Where the result of the management or the difference between revenue and expenditure has been increased as a result of the limitation on the eligibility of excessive borrowing expenditure, the amount by which it has been increased may be reduced by the result of the management or the difference between income and expenditure in the subsequent tax periods or periods for which the tax return is submitted up to the positive difference between the limit on the eligibility of excessive borrowing expenditure and the excessive borrowing expenditure for the tax period or period for which the return is made. The possibility of reducing the result of the economy or the difference between income and expenditure does not go to the legal successor.

§ 23f

Exemptions from the regime to limit the eligibility of excessive borrowing expenditure

The adjustment of the result or the difference between income and expenditure due to the limitation on the eligibility of excessive borrowing expenditure shall not apply to a corporate tax payer who is:

(a) by the bank;

(b) by a savings and credit cooperative;

(c) by a securities dealer;

(d) by an insurance undertaking;

(e) reinsurance undertaking;

(f) pension insurance institutions;

(g) a pension fund;

(h) an investment fund or sub-fund of a variable-capital joint-stock company under the Investment Companies and Investment Funds Act or similar foreign fund;

(i) an investment company managing an investment fund;

(j) a CCP pursuant to a directly applicable European Union regulation governing OTC derivatives, CCPs and trade repositories;

(k) by a CSD pursuant to a directly applicable European Union regulation governing the improvement of securities settlement in the European Union and a CSD; or

(l) by a taxpayer who does not have:

1. an associate defined for the purposes of taxation of a controlled foreign company;

2. a permanent establishment; and

3. the obligation to submit to the preparation of consolidated financial statements under accounting legislation and is not a consolidated entity under accounting legislation.

§ 23g

Taxation on the transfer of property without change of ownership

(1) The transfer of property without a change of ownership from the Czech Republic to abroad is considered to be a transfer of such property to itself for the purposes of income taxes at a price that would be negotiated between the unrelated parties in normal business relations under the same or similar conditions; the result of the business or the difference between income and expenditure of the corporation tax payer shall be adjusted accordingly.

(2) The transfer of property without change of ownership from the Czech Republic to abroad means the transfer of property for income tax purposes

(a) a corporate tax payer who is a tax resident of the Czech Republic, from the Czech Republic to its permanent establishment located abroad, should the exemption method be used as a result of this transfer to exclude double taxation of income resulting from the subsequent transfer of such property,

(b) a corporation tax payer who is a non-resident tax resident from a permanent establishment located in the Czech Republic abroad, if, as a result of this transfer, the income resulting from the subsequent transfer of such property would not be subject to tax in the Czech Republic,

(c) linked to the transfer of the tax resident of a corporate tax payer from the Czech Republic to abroad if, as a result of this transfer, the income resulting from the subsequent transfer of this property would not be subject to tax in the Czech Republic.

(3) The transfer of property from the Czech Republic to abroad shall not be regarded as a consideration of the transfer of property without a change of ownership from the Czech Republic, if it can reasonably be assumed that within 12 months of such transfer of property, it will be transferred back to the Czech Republic, and it is a transfer of assets.

(a) related to the financing of securities;

(b) provided as financial collateral; or

(c) to comply with the regulatory capital adequacy requirement or with the regulatory management of liquidity risk.

(4) If, in the case referred to in paragraph 3, the condition for the transfer of property back to the Czech Republic is not fulfilled, the transfer of property without a change of ownership from the Czech Republic to abroad shall be deemed to be a transfer to itself made during the last tax period or the period for which the tax return may be filed, in which this condition may have been fulfilled.

(5) The transfer of property without a change of ownership from another Member State of the European Union to the Czech Republic, which is subject to taxation in that Member State on the transfer of property without a change of ownership, shall be deemed to be a consideration of acquisition at a price that would be agreed between the unrelated parties in normal business relations under the same or similar conditions; au

(a) tangible and intangible assets shall be treated in accordance with Paragraph 32c, with the exception of paragraph 2 thereof, with the application of a price to be agreed between non-connected persons in normal business relationships under the same or similar conditions, as expressed by the foreign exchange market rate declared by the Czech National Bank for the date of reassignment,

(b) assets amortised only under accounting legislation, the accounting depreciation of which would be the cost of attaining, securing and maintaining taxable income, the result of the holding or the difference between income and expenditure shall be reduced by the price that would be agreed between the unrelated parties in normal business relationships under the same or similar conditions, as expressed by the foreign exchange market rate declared by the Czech National Bank for the date of the transfer; the depreciation of such assets is not expenditure on attaining, securing and maintaining taxable income.

§ 23h

Addressing the consequences of different legal qualifications

(1) Where, as a result of a different legal qualification, the expenditure or other item reducing the result of the economic activity or the difference between income and expenditure reduces the taxable amount of the associated person more than once and, in the context of that multiple reduction, there is no multiple inclusion of the corresponding income in the taxable amount of those associated persons, the result of the management or the difference between the income and expenditure of the corporate income taxpayer who is such an associate shall be increased by an amount corresponding to the reduction of the taxable amount where:

(a) the State in which this item arises or has a source (the State of resources) is not the Czech Republic; or

(b) the State of the source is the Czech Republic and the State in which the taxable amount is also reduced by this item does not apply a similar procedure under this paragraph.

(2) Where, as a result of a different legal qualification, expenditure on account of payment between affiliated persons reduces the taxable amount of at least one associated person and there is no inclusion of income arising from such payment in the taxable amount of the associated person resulting, the result of the management or the difference between the income and expenditure of the corporate tax payer, which is an associated person, shall be increased for which:

(a) there has been a reduction in the tax base by an amount corresponding to a reduction in the tax base to the extent that there is no corresponding inclusion of income in the tax base where the source State is the Czech Republic;

(b) there has been no inclusion of income in the taxable amount, by an amount corresponding to the income not included in the income where the source State is not the Czech Republic and the State in which that payment reduces the taxable amount does not apply a procedure similar to that provided for in this paragraph.

(3) For the purposes of paragraphs 1 and 2, income shall be treated as included in the taxable amount where:

(a) it has been included in the taxable amount not later than 12 months after the end of the tax period or the period for which the tax return in which the expenditure was incurred has been applied; or

(b) it may reasonably be expected to be included in the tax base within a reasonable period of time in any future tax period and the terms of the financial instrument correspond to the terms and conditions agreed by persons who are not associated.

(4) Where an expenditure or other item reducing the result of an economic activity or the difference between the income and the expenditure of an associate is the source of another item reducing the taxable amount of another associate in the situations referred to in paragraph 1 or 2, the result or the difference between the income and expenditure of a corporate tax payer who is an associate shall be increased by an amount corresponding to the reduction of the taxable amount by that item, to the extent that no adjustment similar to paragraph 1 or 2 has taken place in another State.

(5) For the purposes of dealing with the consequences of a different legal qualification, the associated persons defined for the purposes of taxation by a controlled foreign company, provided that the condition of a stake in the capital, voting rights or profit is at least 50%, otherwise associated persons and a corporation tax payer and its permanent establishment. Persons acting jointly for the purposes of voting rights or shares in capital shall be treated as if they were to participate in another person in the scope of any voting rights or capital shares held jointly by the persons acting together. ';

20. in Article 34a (1) (a) and (b), "the implementation of a research and development project" is replaced by "research and development."

21. In Paragraph 34b (1) (a) of the introductory part of the provision, the words "from the date of the notification of intent to deduct from the tax base the deduction to support research and development" shall be inserted after the word "spent."

22. After Paragraph 34b, the following Section 34ba is inserted:

„§ 34ba

Notice of intent to deduct from the tax base the deduction to support R & D

(1) The taxpayer intending to deduct from the tax base the deduction for the promotion of research and development in the context of the implementation of the R & D project shall notify the tax administrator separately for the individual R & D project.

(2) In the notification referred to in paragraph 1, the taxpayer shall indicate:

(a) the name of the research and development project, reflecting its general focus; and

(b) basic identification data on the taxpayer, which shall be:

1. business name and address of the taxpayer's registered office, if the taxpayer is a corporation tax payer;

2. the name, address of the business office and address of the place of permanent residence of the taxpayer, if he is a taxpayer of the income tax on natural persons; and

3. tax identification number, if assigned.

(3) The fine for failure to fulfil an obligation of a non-monetary nature shall not apply where the taxpayer does not submit a notice of intent to deduct from the tax base the deduction to support research and development. ';

23. The heading of § 34c reads:

"Project documentation."

24. in § 34c (1), the introductory part of the provision reads:

"To the R & D project to which the notice of intention to deduct from the tax base the deduction for research and development support is linked, the taxpayer shall process the project documentation indicating the notified name of the R & D project and defining the R & D activity under the R & D Support Act. Project documentation contains'.

25. in Article 34c (1) (d):

"(d) projected expenditure in each year of project management since the year in which the notice of intent was submitted to deduct from the tax base the deduction to support R & D and the expected total expenditure for project management,"

26. in Article 34c (1) (e), the words "to be professionally secured" shall be replaced by the words "to deduct from the tax base the deduction to support research and development by professional means or by";

27. in Article 34c (1), at the end of the text in point (f), the words "carried out from the date of submission of the notice of intent to deduct from the tax base the deduction to support research and development."

28. in Article 34c (1) (g), the words "and instead of" shall be deleted and the word "project" shall be replaced by "project documentation."

29. in Article 34c (1) (h), the words "responsible persons for the research and development project" shall be replaced by the words "persons authorising the project documentation."

30. in Article 34c (2) and (3):

"(2) The deduction in support of R & D related to the notified R & D project may be deducted from the tax base first for the period for which the project documentation is approved within the time limit for the submission of the due tax return. The project documentation must be approved within this period even if the deduction for R & D support cannot be deducted in that period due to a low tax base or tax loss.

(3) The person authorising the project documentation is the taxpayer of the income tax

(a) natural persons such a taxpayer or natural person authorised to act for that taxpayer;

(b) legal persons, a natural person authorised to act for that taxpayer. ';

31. in Article 34c, the following paragraph 4 is added:

"(4) The payer shall record changes in the facts contained in the project documentation that occur after its approval. The title and objectives of the R & D project shall not be changed for the duration of the R & D project. ';

32. in Article 34e (1), the words "which submitted a notice of intent to deduct from the tax base the deduction to support research and development," shall be inserted after the word "taxpayer."

33. in Article 34e (3) (a), the word "project" is replaced by "name and objectives of the project."

34. in Article 34e (3) (b), (c) and (e), the word "projects" is replaced by "projects."

35. in Paragraph 34e, paragraph 4 is deleted;

36. in Article 38d (3), the third and fourth sentences are deleted;

37. The following Section 38da is inserted after Section 38d:

„§ 38da

Notification of income abroad

(1) A tax payer who is a payer of income derived from resources within the territory of the Czech Republic to a non-resident tax resident, on which the tax is levied by deduction at a specific tax rate, even if that income is exempt from tax or where the international agreement provides that it is not subject to taxation in the Czech Republic, is obliged to notify the tax administrator of that fact.

(2) The tax payer shall be obliged to provide the tax administrator with the notification referred to in paragraph 1 within the period for payment of the tax deducted or collected from the income in question, or to be deducted or collected if the income in question had not been exempt or taxed in the Czech Republic.

(3) The notification referred to in paragraph 1 may be made only:

(a) on a form issued by the Ministry of Finance,

(b) on a printing output from a computer printer having data, content and layout identical to the form referred to in (a); or

(c) data message using remote access in format and structure published by the tax administrator

1. Signed by means of which other legislation links the effects of the handwritten signature,

2. with the verified identity of the feeder in the way that it can be logged into its data box; or

3. retrospectively confirmed under the conditions laid down in the tax rules.

(4) Where the tax payer or his representative has a data box which has been established by law or is required by law to have accounts certified by the auditor, he shall be obliged to make the notification referred to in paragraph 1 only in accordance with paragraph 3 (c).

(5) In the notification referred to in paragraph 1, the taxpayer shall, in addition to the general requirements of the submission:

(a) their identification data;

(b) the identification of the recipient of the income referred to in paragraph 1;

(c) the data relating to the income referred to in paragraph 1 and the tax withheld or collected from that income.

(6) The tax payer is not obliged to submit a notification under paragraph 1 concerning:

(a) income which is exempt from tax or for which the international agreement provides that it is not subject to taxation in the Czech Republic if the aggregate value of income of a given type resulting from a given tax non-resident does not exceed CZK 100,000 in a given calendar month,

(b) income pursuant to Article 6 (4).

(7) The tax administrator may, on request, exempt the taxpayer from the notification requirement referred to in paragraph 1 for a maximum period of 5 years. ';

38. After Paragraph 38f, the following Section 38fa is inserted:

„§ 38fa

Taxation of controlled foreign company

(1) For the purposes of income taxes, the activity of a controlled foreign company and the treatment of its property resulting from the income included is regarded as having been carried out by a controlling company in the Czech Republic at the time of the end of the tax period of the controlled foreign company abroad if:

(a) a controlled foreign company does not carry out a substantial economic activity; and

(b) tax equivalent to corporate tax

1. a controlled foreign company which is a corporation tax payer, in the State of which it is a tax resident, is less than half the tax that would have been imposed on it if it had been a tax resident of the Czech Republic; or

2. the controlling company in the State where the permanent establishment, which is a controlled foreign company, is less than half the tax that would have been established if the activity of the permanent establishment and the management of its property had been carried out in the Czech Republic.

(2) The controlling company is for income tax purposes a corporate tax taxpayer who is a tax resident of the Czech Republic and

(a) which is directly or indirectly involved in the capital of a controlled foreign company, provided that it meets one of the conditions laid down in paragraph 3 (a) (1) and (2), or

(b) whose permanent establishment is controlled by a foreign company.

(3) Controlled by a foreign company for income tax purposes means:

(a) a corporation tax payer who is a non-resident tax where the corporation tax payer who is a tax resident of the Czech Republic, alone or together with associated persons

1. is directly or indirectly involved in the capital of that taxpayer or voting rights of more than 50%; or

2. has the right to more than 50% of its profits;

(b) a permanent establishment of a corporate tax taxpayer who is a tax resident of the Czech Republic, located in a State with which the Czech Republic has a double taxation contract concluded, which is part of the legal order and according to which double taxation of its income is excluded by the exemption method.

(4) Associate persons are, for the purposes of taxation of a controlled foreign company, capital related persons and persons where one person is entitled to at least 25% of the profit of the other person.

(5) Incorporated income for taxation purposes of a controlled foreign company means income of a controlled foreign company arising during its tax period abroad

(a) in the form of borrowing income;

(b) in the form of licence fees;

(c) share of profits;

(d) the loss of a holding in a corporation tax payer;

Citation	Act No. 80 / 2019 Coll., amending certain tax laws and certain other laws
Regulation Type	Law
Author	-
Collection	Code of Laws

Date of Promulgation	27.03.2019
Effective from	01.04.2019
Effective until	-
Status	Valid

Act No. 80 / 2019 Coll.

Law amending certain tax laws and certain other laws

Contents

ČÁST PRVNÍ

Čl. I

„§ 23e

§ 23f

§ 23g

§ 23h

„§ 34ba

„§ 38da

„§ 38fa

Contents

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