Czech Republic: Proving internet advertising expenses

To prove internet advertising expenses claimed in tax return, taxpayer must present screenshots or administrator account

Proving internet advertising expenses claimed in tax return

The Supreme Administrative Court issued a judgment regarding internet advertising expenses—both in terms of their deductibility for income tax purposes and the right to deduct value added tax (VAT).

The court considered whether the taxpayer had provided sufficient proof of the claimed advertising expenses for advertising that took place on the internet and whether the expenses relating to this advertising could be claimed as deductible.

The court agreed with the tax authority that the taxpayer had failed to prove the delivery and receipt of the advertising using one of the two ways to record and prove that the advertising on the interest had taken place—either a screenshot or the administrator account from which the internet advertising was arranged. During the proceedings, the taxpayer submitted several types of evidence. The taxpayer submitted screenshots that were found to be neither distinct from each other nor dated, and thus were insufficient to prove the tax deductibility of relevant advertising expenses.

The court considered it necessary for the taxpayer to provide documentation not only in form of statements containing records of the number of searches and the number of times the website was opened, but also in form of screenshots capturing the advertisement directly from the internet search engine.

The case identifying information is: 10 Afs 74/2020-50

Read a February 2022 report prepared by the KPMG member firm in the Czech Republic


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