Dear readers,
Please find below our short news for August 2023:
- The coalition in the Chamber of Deputies reached an agreement on a draft modification of the consolidation (recovery) package that will be discussed in the second reading this week.
- The coalition proposed enacting a possibility to keep books in “functional currency”. As a result, entities with majority of transactions denominated in EUR, USD or GBP would be able to keep books in that foreign currency from 1 January 2024.
- Another proposed modification in the recovery package addresses unrealised exchange rate gains and losses. Entities would revalue their receivables in a foreign currency at the end of the accounting period. As a consequence of such revaluation, entities may report profits due to the tendency of foreign currencies’ weakening, and those profits will be subject to tax in the particular accounting period. This unrealised profit will newly be tax non-deductible.
- Other proposed changes in the consolidation package approved by the coalition can be found here.
- The Chamber of Deputies approved the Act on Balancing Taxes for the Purposes of Providing for a Minimal Level of Taxation of Large Multinational and Large National Groups in the first reading on 29 August 2023. The proposed law (Parliamentary Press No. 515) should come into force on 31 December 2023. This law would bring income from two new taxes into our budget: allocated balancing taxes and Czech balancing taxes. You can find more information here.
- The General Financial Directorate issued two Information in August:
- The General Financial Directorate’s Information on applying VAT in a free supply of goods here.
- Information on determining the level of tax deductible costs for the purpose of determining the corporate income tax base in disposing of a new piece of construction work carried as inventory at the moment of selling it here.
- The Act on Whistleblowers’ Protection came into force on 1 August 2023. Under this law, corporations with a headcount of 250 and more are obliged to establish an internal notification system so that whistleblowers are able to file their notifications in writing, orally or in person. This obligation will also extend to employers with 50 and more employees in December 2023. The complete text of the Act on Whistleblowers’ Protection is available here.
- The Ministry of Finance of the Czech Republic launched pilot operation of a re-designed Administrative Register of Economic Entities (ARES) on 13 August 2023. www.ares.gov.cz.
Marek Švanda Michaela Kozminská
svanda@edmutilitas.cz kozminska@edmutilitas.cz
