Central Europe Tax&Legal Highlights


Central Europe Tax & Legal Highlights

January 2018

Welcome to the Tax & Legal Highlights newsletter. This page provides you with the latest information on tax and legal related issues from around the Central Europe region. For more specific information – choose your country and find out more about local tax practices and news around the region.


2018 fiscal package includes changes to corporate tax rate, VAT rate and incentives for certain sectors
Albania’s fiscal package for 2018 introduces amendments to a number of the country’s tax laws; the following summarizes the most important changes related to corporate income tax, VAT and local taxes. Unless otherwise stated, the new rules apply as from 1 January 2018.

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New Concessions Act
The new Concessions Act came into effect on 1 January 2018 and repealed the old Concessions Act and the Public-Private Partnerships Act.

Amendment and supplementation to the Labour Code
The amendment aims to provide employees with additional protections in cases where their employers do not pay due salaries and compensations

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Czech Republic

Upcoming Changes in the Income Taxes Act
What substantial changes may be expected this year?

R&D Deduction – Further Requirements for Taxable Entities?
In late 2017, a new judgment of the Supreme Administrative Court (hereinafter the “SAC”) was issued, raising further doubts among many taxpayers as to the accuracy of their current approach. Below is a brief summary of the principal points of the judgment.

Including VAT in the tax base for the calculation of property acquisition tax
The Financial Administration confirmed that the tax base for the calculation of property acquisition tax should not include value added tax, not even when the tax payer is the acquirer.

Application of the Amended Foreigners’ Residence Act in Practice
Effective since 15 August 2017, Act No. 222/2017 Coll., amending Act No. 326/1999 Coll., on Foreigners’ Residence in the Czech Republic, has come into force.

New Treaty between the Czech Republic and Korea Signed

Tax Treaty with Taiwan

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New lease standard may bring additional obligations
IFRS 16 is a new lease standard, which requires lessee to recognize right-of-use assets stipulated in lease contracts on its balance sheet as when signing lease contracts, the lessee gains the right to use the leased assets (assets user rights as immaterial assets) and associated liability arises for payments to lessor for using the asset (liability arises from right to use).

Estonian tax authority released new guidelines
As of January 2018, the Income Tax Act amendments came into force and the Estonian Tax authority will now have more specific grounds to tax the loans granted by Estonian companies to their parent or sister companies, in cases where circumstances indicate that in substance the loan may be a hidden profit distribution.

Tax amendments regarding sole proprietors
The Law on Amendments to the Social Tax Act and the Income Tax Act announced at the end of the year 2017, will create a more favorable tax environment to the sole proprietors (FIE).

VAT act states a new threshold for mandatory registration as VAT taxable person
As of year 2018, the obligation to register as VAT taxable person arises, when taxable supply carried out by a person exceeds 40,000 euros (until the end of 2017 the threshold was 16,000) as calculated from the beginning of a calendar year.

Tax treaty ratified between Estonia and Kyrgyz Republic
Agreements between the Government of the Republic of Estonia and the Government of the Kyrgyz Republic; and between Japan, for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income were ratified in the end of December 2017.

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Regulatory changes pertaining to cross-border transactions
In this newsletter we have summarised the key details of the modifications adopted by European Council in December pertaining to the simplification of the cross-border supply of products and services.

New non-refundable R&D grant options also for large companies
We wish to draw your attention to two new calls for applications published on 9 January 2018 by the National Research, Development and Innovation Office offering non-refundable grants for the R&D projects of SMEs and large companies: The call for applications entitled Grant for the R&D&I Activities of SMEs and Large Companies (2018-1.1.2-KFI) provides a non-refundable grant between HUF 100-600 million for R&D projects to be implemented in the Central Hungarian region.

Detailed rules of online data reporting have been published
The draft amendment of the Ministry decree on invoice data reporting has been published on the Government website together with the technical system requirements.

There is a short period of six months to prepare for the changes. Deloitte is ready to fully assist its clients in this process.

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Transport package – amendment in progress at the Sejm
On 5 January 2018, the Sejm received a bill amending the act on the system of monitoring the road transport of goods and some other acts (hereinafter: "draft" or "amendment"), which introduces new regulations in the field of the so-called transport package.

Amendment to the Act on Foreigners. Implementation of the ICT Directive on intra-corporate transferees and their mobility in the EU
On 12 February 2018, the provisions of the amended Act on foreigners implementing in the Polish legislature the provisions of Directive 2014/66/EU of the European Parliament and of the Council of 15 May 2014 on the conditions of entry and stay of third-country nationals as part of an intra-corporate transfer come into force.

Introduction of a new daily reporting obligation. On 13 January the regulations of the Act on STIR (Teleinformation System of the Clearing House) came into force
On 13 January 2018, the provisions of the Act amending certain acts in order to counteract the use of the financial sector to tax fraud (the "Act") published on 29 December 2017 in the Journal of Laws, entered into force. The provisions of the new act are introduced by STIR ("IT System of the Clearing House").

The Sejm accepted the Senate's amendments to the law on the prohibition of trade on Sunday and on holidays
On January 10th, the Sejm accepted all the Senate's amendments to the act on limiting trade on Sundays and holidays.

New requirements on the remuneration of insurance distributors are approaching. Work on the implementation of the IDD Directive is entering the last phase
On 28 December 2017, President Andrzej Duda signed the Act of 15 December on insurance distribution, which implements the Directive of the European Parliament and of the Council (EU) into the Polish legal order. The new regulations enter into force on 23 February and are to serve primarily to improve the situation of clients who are to be provided with protection at the same level, regardless of the differences between the various insurance distribution channels.

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VAT split payment – The final form of the law
Only the companies having VAT debts or in insolvency will mandatory apply the VAT split payment system starting with 1 January 2018, according to the final form of the law on the VAT split payment, published in the Official Gazette.

New changes regarding contributions and taxes due to the Environment Fund
New methodological rules for calculating the contributions and taxes due to the Environmental Fund came into force on December 28, 2017, according to Order of the Ministry of Environment no. 1503/2017 for modifying and completing the methodology of calculation of taxes and contributions due to the Environment Fund.

The national average gross salary applicable for 2018 was published
The value of the national average gross salary used for establishing the budget of the state social insurance for the year of 2018 is 4,162 lei.

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New Ministry of Finance Rulings – Value Added Tax

New Ministry of Finance Rulings – Corporate Income Tax

2017 non-taxable threshold for annual income tax purposes and adjusted non-taxable amounts in Serbian currency (RSD) for 2018

2018 maximal monthly social security contribution base and 2017 maximal annual social security contribution base

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Information on the Amendment to Act No. 595/2003 Coll. on Income Tax, as Amended
The Financial Directorate of the Slovak Republic published information on the amendment to the Income Tax Act.

Amendments to the Value Added Tax Act
Act No. 334/2017, amending the VAT Act, was published in the Collection of Acts of the Slovak Republic on 23 December 2017. The amendments to the VAT Act are effective from 1 January 2018.

OECD Transfer Pricing Country Profiles – the Slovak Republic
OECD has updated several transfer pricing country profiles, prepared by tax authorities of the respective countries, including the Slovak Republic.

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Personal Income Tax Act (hereinafter `PIT Act`) amendments
Effective as of 01.01.2018, certain amendments to Slovene PIT Act apply, which are relevant for individuals assigned to and from Slovenia. A special determination of tax base for assignment income received as of 01.01.2018 has been introduced together with certain changes regarding the tax treatment of costs reimbursed with relation to temporary assignments.

Transnational Provision of Services Act entering into force
Please note that as of 01.01.2018 the Transnational Provision of Services Act is effective in Slovenia, implementing the provisions of Directive 67/EU/2014 of the European Parliament. The respective Act regulates the cross-border provision of services for employees posted to Slovenia from other EU Member States or vice versa, considering the employees shall remain included in the social security system in their home country (i.e. A1 form should be obtained).

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