Zpětné uplatnění osvobození licenčních poplatků - pohled Soudního dvora EU

We have a continuation of an interesting dispute regarding the interpretation of the conditions for applying the exemption under the EU Interest-Royalty Directive (“EU I-R Directive").

In this dispute, the Czech tax authority granted the company the right to exemption under the EU I-R Directive for the tax periods 2017 and 2018, but rejected the requests for the previous periods. The company had applied for the exemption in June 2019, which the tax authority deemed to be beyond the two-year period for the years 2014, 2015, 2016.

The company challenged the tax authority's decision with a lawsuit, which was dismissed by the municipal court, and the dispute subsequently reached the Supreme Administrative Court (NSS).

The NSS had doubts about the interpretation of the EU I-R Directive and therefore referred a preliminary question to the Court of Justice of the EU (CJEU).

According to the CJEU, the EU I-R Directive should be interpreted as follows:

• It allows the source member state, based on a decision under Article 1(12), to grant an exemption from tax for periods preceding the moment of issuance of that decision (or submission of the attestation and supporting information);
• It does not set a deadline for the submission of the attestation and supporting information that the source member state may reasonably require for the purpose of issuing a decision on granting the exemption under Article 1(12), nor does it impose a time limit regarding how long a period preceding their submission can be exempted from tax (it is up to national law to establish this deadline based on the principle of procedural autonomy, and it is up to the Czech court to verify whether there is a deadline applicable in the given situation under Czech law).

Authors:
Radek Matuštík
Petr Sedláček