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Czech Republic: No time limit for filing royalty and interest tax exemption application (Supreme Administrative Court decision)

The Supreme Administrative Court aligned its interpretation with EU law, removing the previous two-year deadline.

July 16, 2026

The Supreme Administrative Court (SAC) held in July 2026 that filing an application for a decision granting exemption from income tax on royalties and interest is not subject to any time limit. This decision follows a preliminary judgment by the Court of Justice of the European Union (CJEU) in case C-828/24.

Background

The dispute involved a company that in June 2019 applied for an exemption for the tax periods from 2014 to 2018. The tax administrator had rejected the application for 2014 to 2016 based on previous case law (3 Afs 250/2016), which required filing within two years of meeting the conditions. On appeal, the SAC referred the matter to the CJEU.

The CJEU held that Council Directive 2003/49/EC does not limit retroactivity or set a deadline for submitting supporting certificates. Consequently, the SAC confirmed that its previous case law is superseded, and no time limit applies to exemption applications for royalties or interest. However, the two-year limit for filing a tax refund application remains unaffected.

Read a July 2026 report prepared by the KPMG member firm in the Czech Republic

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