Czech Republic: Deductibility of advertising costs (Supreme Administrative Court decisions)
Summaries of decisions of the Supreme Administrative Court relating to the deductibility of advertising costs
Summaries of decisions of the Supreme Administrative Court relating to the deductibility o
The KPMG member firm in the Czech Republic prepared a report that includes summaries of the following decisions of the Supreme Administrative Court relating to the deductibility of advertising costs.
7 Afs 53/2020 – 30: non-deductible entertainment costs
The court held that expenses for renting a go-kart track for business partners were not deductible because the taxpayer did not demonstrate that the renting was the subject of advertising and not intended solely to give existing business partners an opportunity to race for free.
8 Afs 42/2020 – 58 and 2 Afs 219/2021-54: substantiating advertising expenses
The court confirmed that the taxpayer bears the burden of substantiating expenses for advertising broadcasted on screens at shopping malls.
1 Afs 88/2022 – 54: change in scope of services by oral agreement
The court held that if a taxpayer seeks to deduct advertising expenses for services beyond those provided for in the original contract, the taxpayer must provide other means of evidence credibly supporting the extent of the services provided.
7 Afs 13/2021 – 44: challenging the price of advertising
The court held that expenses for advertisements placed at football stadiums and golf courses could be disallowed because the prices for such advertisements were higher than arm’s-length, even though the transaction technically involved a supply of services between unrelated parties. The court found that the deduction must be limited to the price negotiated directly with sports clubs plus the usual commission.
Read an April 2023 report prepared by the KPMG member firm in the Czech Republic
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