Czech Republic: Proposed amendment to legislation introducing top-up tax, implementing EU directive on global minimum tax
A draft amendment to the law introducing a top-up tax to implement the EU directive on global minimum tax in the Czech Republic
August 27, 2024
The Ministry of Finance published a draft amendment to the law introducing a top-up tax to implement the EU directive on global minimum tax, which became effective on December 31, 2023. Read TaxNewsFlash
The changes include:
- The deadline for filing tax returns for the allocated and Czech top-up tax would be unified to 22 months from the end of the reporting period (i.e., for the calendar year 2024, it would be October 31, 2026). The deadline for filing information returns for the allocated and Czech top-up tax would be 15 months from the end of the reporting period (18 months in the case of the first-time period). The deadline for filing the information returns for the first-time period of calendar year 2024 would thus be June 30, 2026.
- A new option regarding the information obligation for the Czech top-up tax would be introduced—the obligation could be met by filing an information return on the allocated top-up tax, provided that it contains the essential information as required for the information return on the Czech top-up tax and that the taxpayer using this option notifies the tax administrator.
- To make certain the Czech top-up tax meets the safe harbor rules, the range of payers of Czech top-up tax would be extended to joint ventures and their affiliates, stateless main entities whose activities are carried out in the Czech Republic provided that these activities can be taxed in the Czech Republic under the relevant international treaty, and tax transparent entities established under Czech law that are not resident in any state
- The definition of a tax credit and currency conversion rules would be clarified.
If promulgated, the amendment would be effective for tax periods commencing on or after December 31, 2023.
Read an August 2024 report prepared by the KPMG member firm in the Czech Republic
Read a September 2024 report prepared by the KPMG member firm in the Czech Republic that summarizes 15 key changes in the draft amendment