Omezení převzetí daňové ztráty v rámci přeměny

With this alert, we would like to continue our series of alerts regarding the periods open for tax reassessment.

As we have mentioned in our previous alerts HERE and HERE, according to the Income Taxes Act, the deadline for tax assessment for a period for which a tax loss was assessed expires for all periods in which this loss could be applied, simultaneously with the assessment period for the last tax period in which this loss could be applied.

Under the Income Taxes Act, a successor company may, under certain conditions, take over the tax loss of a dissolving company during a restructuring. However, the transfer of the tax loss generally also entails an extension of the open periods for the successor company.

In practice, situations may arise where the successor company is not interested in taking over the tax loss of the dissolving company, for example, due to uncertainty regarding the provability of the amount of the transferred loss or the anticipated failure to meet the conditions set by the Income Taxes Act (the loss can only be applied up to the amount of the tax base attributable to the same activities that the taxpayer performed in the period for which the tax loss was determined).

Until recently, it was unclear whether it was possible not to take over the tax loss and thereby not extend the period during which the tax administrator could reassess the tax.

In connection with the decision of the Supreme Administrative Court 7 Afs 191/2021-35 regarding the possibility of not taking over the tax loss in the case of a substantial change in the composition of persons directly participating in the capital or control of the company, this issue was discussed by the Coordination Committee of the Chamber of Tax Advisors and the General Financial Directorate. According to their conclusions, it should be possible to waive the take-over of the tax loss in the case of a corporate restructuring, thereby achieving, among other things, the non-extension of the deadlines for tax assessment.

However, it is important that this decision is announced to the tax administrator before the actual registration of the restructuring in the commercial register. The General Financial Directorate emphasizes that once a decision to waive the tax loss has been made, it is irrevocable and cannot be changed later. We would like to point out that the conclusions of the coordination committees are not legally binding; however, in practice, the financial administration generally respects them.

Authors:

Ladislava Zamazalová

Iuliia Potridennaia