Danova sprava k rezimu vylucovani nerealizovanych kurzovych rozdilu

Tax Administration on the exclusion regime for unrealised exchange rate differences

The General Financial Directorate (GFD) has issued a warning (HERE) on the regime of exclusion of unrealised exchange rate differences under the new legislation of § 23i and § 23j of the Income Tax Act (ITA).

The GFD warns that the Information on the issue of "unrealised" exchange rate differences with regard to the case law of the Supreme Administrative Court from 2013 (HERE) is not relevant for the new tax regime of exclusion of unrealised exchange rate differences under § 23i and § 23j of the ITA.

The GFD suggests that realisation for the purposes of this new optional regime generally occurs when the currency risk ceases or its carrier or substance changes. Thus, according to the GFD, the currency risk ceases to exist, for example, at the time of the write-off of the receivable or the collection of the receivable and the crediting of the funds to a bank account in the currency of the accounts. Similarly, according to the GFD, any unrealised exchange rate difference previously excluded from the tax base should be taxed in a situation where the collection of a receivable is credited to a bank account held in a foreign currency - in such a case, although the currency risk still exists, it is no longer on account of the receivable, but on account of the holding of foreign currency (i.e. its carrier has changed).

The GFD announces that, for the legal certainty of taxpayers, it will publish, in cooperation with the Ministry of Finance, more detailed information with instructive examples.

If you are interested in this area, please contact the authors of the article or the EY advisory team you usually work with.

Authors:

Lucie Říhová

Hana Cicvárková