Central Europe Tax & Legal Highlights

Albania

First part of the Fiscal Package 2019
The first part of the Fiscal Package 2019 was recently published bringing in amendments related to VAT and local taxes.

Law “On VAT”

Law “On local taxes”

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Czech Republic

Demonstrating the Receipt of Intragroup Services: Are you Prepared?
A large number of Czech businesses that are part of multinational groups already have first-hand experience that the Czech tax administration’s approach has undergone a fundamental change in recent years as regards tax audits focusing on related party transactions. The lack of any form of communication with the tax administrator (such as on-the-spot inspections) concerning related party transactions is rather an exception at present. Contrarily, regular contact with tax payers or directly a tax audit of intragroup transactions is becoming common practice.

The echoes of tax inspections on one-crown bonds
The discussion concerning one-crown bonds is continuing. As repeatedly debated in the media, the Financial Administration continues to carry out tax inspections of the companies which issued so-called one-crown bonds through the end of 2012. Proceeds from these bonds issued through the end of 2012 are not subject to effective taxation due to the rounding down to the whole Czech crown. Although at the time it was a routine form of financing, nowadays, the tax authorities in many cases challenge the economic reasons for placing one-crown bonds, treating the issuance of such securities as an abuse of law with all the related tax consequences.

The Czech Ministry of the Interior has Issued Brexit-Related Recommendations to UK Citizens
In relation to the upcoming exit of the United Kingdom of Great Britain and Northern Ireland from the European Union in spring 2019, the Ministry of the Interior of the Czech Republic has issued recommendations addressed to the citizens of the United Kingdom residing in the Czech Republic.

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Hungary

Summary of the provisions of the summer tax package
The Parliament voted in favour of the 2019 tax law amendments on 20 July 2018. Read our summary in which our experts explain the most important facts regarding the tax laws taking effect next year.

Contents
1. Personal income tax
2. Social security contribution, social tax and health tax
3. Simplified entrepreneurial tax
4. Individuals' solidarity surtax
5. Corporate income tax
6. Innovation contribution
7. Local business tax
8. Accounting Act
9. Value added tax
10. Special taxes concerning the financial sector
11. Financial transaction tax
12. Insurance tax
13. Act on the competitiveness of district heating
14. Excise tax
15. Customs regulations
16. Vehicle registration tax
17. Public health product tax
18. Amendments related to the rules of taxation
19. Surtax on aiding groups supporting immigration

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Lithuania

The National Lithuania’s Cybersecurity Strategy was approved
On 13th of August the Government of Lithuania approved the National Cybersecurity Strategy, which sets out key national security policies for public and private sectors for five years.

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Poland

Change in certain double taxation avoidance regulations applicable to individuals generating income abroad. Multilateral Instrument coming into effect
On 1 July 2018, Multilateral Instrument to Modify Bilateral Tax Treaties (MLI) came into force, modifying certain double tax avoidance principles arising from international agreements concluded by Poland.

New draft Regulation on Polish Investment Zone approved. Quantity criterion significantly relaxed
On Thursday 26 July Permanent Committee of the Council of Ministers approved a new draft Secondary Regulation to the Act on Supporting New Investments (henceforth: “New SEZ Regulation”).

Act on National Cybersecurity System: new obligations of key utility operators and digital services providers
Businesses in the energy, transport, banking, payment services and healthcare sectors, suppliers of drinkable water or digital infrastructure, classified as so-called key utility operators, as well as digital service suppliers, must prepare to stand up to new challenges, this time regarding cybersecurity.

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Romania

New rules governing the financial services and activities
Law no. 126/2018 on markets in financial instruments that transposes in the Romanian legislation the EU Directive no. 65/2014 on markets in financial instruments (MiFID II) entered into force in July 2018. We summarized in this legal alert some of the key important provisions of the Law no. 126/2018.

European Commission amends the exporter definition from a customs perspective
More than two years after the entry into force of the New Union Customs Code, the European Commission amends the exporter's definition from a customs perspective. The new definition should be less restrictive and limits the conditions to be met in order to act as an exporter to the essential requirements of the functioning of the export customs regime.

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Slovakia

Guidance on Classification of a Professional Sportsman’s Income from Collective Sport
The guidance defines the difference between individual and collective sports and possible legal forms of performing professional collective sports activity including the type of income under which such activity is to be categorised.

Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI)
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) was ratified by the Slovak Republic on 30 July 2018.

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Previous editions

• Central Europe Tax&Legal Highlights, July 2018 (PDF)
• Central Europe Tax&Legal Highlights, June 2018 (PDF)
• Central Europe Tax&Legal Highlights, May 2018 (PDF)
• Central Europe Tax&legal Highlights, April 2018 (PDF)
• Central Europe Tax&Legal Highlights, March 2018 (PDF)
• Central Europe Tax&Legal Highlights, February 2018 (PDF)
• Central Europe Tax&Legal Highlights, January 2018 (PDF)
• Central Europe Tax&Legal Highlights, December 2017 (PDF)
• Central Europe Tax&Legal Highlights, November 2017 (PDF)
• Central Europe Tax&Legal Highlights, October 2017 (PDF)
• Central Europe Tax&Legal Highlights, September 2017 (PDF)
• Central Europe Tax&Legal Highlights, August 2017 (PDF)