Pilíř 2: Očekávaná novela schválena Senátem!

The lengthy process of amending the current wording of the Act on Top-up taxes appears to be coming to a successful conclusion – the amendment was approved by the Senate on Wednesday and now only awaits the president's signature.

As we have already informed you, the main common goal of the entire amendment is to qualify the Czech top-up tax as a so-called QDMTT and also for the QDMTT safe harbor.

As a brief summary of the most significant changes, we have selected the following points from the many conceptual and legislative-technical clarifications in the amendment:

• Deadline extension for filing the Czech QDMTT tax return and information return from the current 10 months to 22 months in the case of tax return and 15 months in the case of information return (18 months for the first reporting period);
• Scope expansion of taxpayers subject to the Czech QDMTT to include joint ventures (JV) and flow-through entities;
• Reflection of new OECD interpretations not only in the CbCR safe harbor rules – in particular, adjustments to purchase price allocation (PPA), hybrid arbitrage arrangements, modifications to provisions on the availability of the safe harbor for investment entities, or limitations on deferred tax assets associated with so-called governmental arrangements;
• Clarification in the area of currency conversion of the Pillar 2 calculations; and
• Minor changes to certain definitions, e.g., partially owned parent entities or investment funds.

The last steps in the very long legislative process are the signature of the President, where we do not expect complications, and issuance of the act in the Collections of Laws.

Authors:

Karel Hronek

Dominik Živný