Tax and Legal News – May 2026

Where are you headed, tax system?

I’ve been writing editorials in this format for over 15 years. With a little luck, this one might be the 75th. It will certainly be my last EY. Not all of them were entirely successful, so if you’re still reading them, thank you very much for your support. I’ve covered every possible topic here, including grumbling about the law, lawmakers, tax authorities, the Supreme Administrative Court, the OECD, and many others. I’ve also received a few complaints from some people—some justified, some not—who felt affected.

In the last century, I couldn’t imagine how the tax break for expats could ever be eliminated, and yet it was... In this century, I didn’t believe anyone would do away with the “debt push-down” scheme, the koruna bond, and the concept of the beneficial owner—and yet they did. So I suppose eventually we’ll see taxation on the sale of securities and tax consolidation as well.

The current tax system has grown considerably since 1993; the laws are longer and significantly more complex. That makes sense—the whole world has become more complex. However, while many things are more complex, they’re also more user-friendly—and that’s the direction the world should be heading in. My car today is orders of magnitude more complex than my first Škoda 105, but it drives much better. My first Atari was undoubtedly much simpler than my iPad today, but I probably wouldn't want to work with it anymore. Similarly, just dealing with tax regulations is becoming more and more of a headache.

Why are we making things harder on ourselves? I still believe that most changes are driven by a desire to make the system fairer, so that everyone pays their fair share. It may be fairer, but it will never be fair. Taxpayers will always grumble that taxes are unfair. Today, they grumble that they’re unfair—and complicated to boot.

Income tax is primarily based on financial results. We have international accounting standards (which are complex in and of themselves) that strive to provide a true and fair view. So why don’t we take the true and fair financial results from these standards and simply apply the tax rate to them? Instead, we have to prepare separate national accounts, the purpose of which is to provide (presumably) a more accurate and honest picture. I don’t really understand why most countries think their national accounts are more accurate and honest. And even if they were, is it worth the trouble to prepare such accounts? And then I’ll run this more accurate and honest financial result through a long list of tax adjustments. Why? Because I want to make my more accurate and honest result even more accurate and honest? And I’ll answer that right away: it wouldn’t be worth the trouble. So the logical reason is that the government wants to regulate the amount of tax collected. But why not do it with a higher or lower tax rate? Because a higher rate is more visible and would either drive people into the streets or prompt business owners to relocate their operations? And perhaps taxes are a great tool for encouraging or discouraging certain behaviors among business owners, thereby influencing the market environment without direct intervention. Bans and mandates on how to behave in the market would be a problem; taxes are already a necessary evil by their very nature, so imposing even more of them isn’t really a problem. And so it’s easier to create a new field of study called “calculation of tax depreciation and allowances,” which is so complex that no one is likely to take to the streets over it.

The result of all this complexity surrounding fair and equitable taxation is to ultimately realize that, globally speaking, taxes are actually being paid completely wrong and this needs to be addressed. Ten years ago, there may have been an opportunity to streamline the system and simplify the entire logic of taxation. For example, pay taxes where you have customers and employees. Instead, we’ll add another layer of BEPS complexity to plug the holes in the current, sophisticated system. But it’s still not enough, and taxes still aren’t being paid fairly. So let’s solve this simply: BEPS 2.0, and everyone better make sure they pay at least 15%. Simple, great idea. But the implementation. Essentially another layer, even more robust and complex than the entire process of creating the most accurate and honest tax base. Is it even worth it anymore?

I know I’m not entirely objective, and experts who really understand this will tell me that I’m imagining it all like a child imagines war. They’re right. My fellow tax advisors won’t like me, because this is simply a great business opportunity. But from an outsider’s perspective, that’s exactly how it looks.

I wish the tax system a bright future, and I hope that you, the readers of our Tax News, will enjoy even smarter and more engaging editorials from my wonderful colleagues.