Czech Republic: Summaries of recent Supreme Administrative Court decisions

Interest on intra-group financing held non-deductible; expenses not deductible solely because included in related-party pricing arrangements

The KPMG member firm in the Czech Republic prepared reports on recent tax-related Supreme Administrative Court (SAC) decisions:

The SAC in August 2025 held that interest on a loan arising in the context of a corporate group’s internal restructuring was not deductible because the restructuring was primarily motivated by tax avoidance and lacked economic substance. Read an October 2025 report
The SAC held (3 Afs 14/2024) that expenses typically considered non-deductible, such as entertainment or penalties, are not deductible solely because they are included in related-party pricing arrangements (i.e., charged to the parent company under a cost plus model), unless there is a demonstrable and genuine economic link between the expenses and the generation of taxable income. Read a September 2025 report

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Czech Republic: Summaries of recent Supreme Administrative Court decisions

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