Central Europe Tax & Legal Highlights

Czech Republic

Inconspicuous amendments to the Income Tax Act
A brief summary of additional amendments to the Income Tax Act undergoing the legislative process

Defending One’s Tax-Related Rights Is Not a Losing Battle
Although in some cases defence against decisions and procedures of the Tax Administration of the Czech Republic may seem to be a lengthy battle with uncertain outcomes, the recent rulings of the Supreme Administrative Court (“SAC”) often indicate the opposite. In early 2018, the SAC issued two crucial rulings substantially revising the tax authorities’ practice and setting a positive direction towards taxable entities.

The Battle for Professional Secrecy is Over. Or is it…?
The proposed amendment to the Tax Code, about which we have already informed you, was, following heated debates, finally approved by the Chamber of Deputies of the Parliament on 21 March 2018.

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Hungary

NGM position on the anti-money laundering obligations of real estate industry players
During the past month significant developments have occurred in the real estate industry regarding compliance with the anti-money laundering requirements. In January the Ministry for National Economy (NGM) prepared the reviewed national risk assessment and issued a position in response to the request of the Ingatlanfejlesztői Kerekasztal Egyesület (Real Estate Roundtable), and NAV also published its risk assessment and is expected to launch increased supervisory action.

The pitfalls of electronic procedures and the new procedural practice
The new statutory provisions on electronic communication effective as from 1 January 2018 have caused a number of surprises and difficulties for companies. Pursuant to the Act on the General Rules for Trust Services and Electronic Transactions (Act CCXXII of 2015), since 1 January 2018, communication with courts and authorities has been possible only by means of electronic communication, but experience suggests that neither companies nor courts nor authorities had been fully prepared. In addition to the act on electronic transactions, the new Act on Civil Procedure (Act CXXX of 2016) also entered into force at the beginning of the year, which posed additional challenges for those seeking compliance. This edition of our newsletter draws our clients’ attention to the most common risks and practical experience.

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Latvia

Submission of Annual Income Statements
From March 1, natural persons may submit their Annual Income Statement to SRS for receiving overpaid personal income tax for eligible expenses.

Amendments to the Law on Credit Institutions
On March 16, amendments to the Law on Credit Institutions came into force, providing for a reduction in the basis for calculating remuneration for a liquidator or insolvency administrator of credit institutions.

Law on the Official Electronic Address has come into force on March 1
In accordance with the Law on the Official Electronic Address, legal entities registered in the records shall create the official electronic addresses and use it for sending and receiving documents from public institutions as of 1 June 2018.

Amendments to the Notariate Law
Amendments to the Notariate Law, which strengthens the issue of liability of sworn notaries and applies additional restrictions to candidate for sworn notaries, have come into force on March 23.

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Lithuania

Court of Justice of European Union issued the decision regarding the protection of depositors and investors of bankrupt bank “Snoras”
On 22 February 2018 the Court of Justice of the European Union (hereinafter referred to as "the Court of Justice") issued a decision where it provided explanations regarding issues raised by the Supreme Court of Lithuania related with the protection of the depositors and investors of the bank “Snoras”.

The rules on capital adequacy requirements of management companies have been changed
On 6 March 2018 on the basis of the ruling of the Board of the Bank of Lithuania the rules on capital adequacy requirements of the management companies have been changed.

Guidelines on good governance of collective investment undertakings intended for informed investors

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Poland

New entitlements of court-appointed agents are to make debt collection more effective
New amendments that, inter alia, are aimed to considerably extend the rights vested in agents of companies appointed pursuant to Article 43 of the Civil Code (CC) and Article 69 of the Code of Civil Procedure (CCP) came into force as from 15th March 2018. The changes seem especially favourable for those creditors that find it difficult to collect their receivables because of unfair hindering practices applied by debtors.

The Revised Payment Services Directive (PSD2) - responsibility for unauthorised transactions
PSD2 is an important step towards the implementation of a Single Euro Payments Area (SEPA). It is also the response to the dynamically developing market for payment services. Apart from regulating the activity of the institutions defined as third party providers (TPP) and the services rendered so far, such as account information services (AIS) and payment information services (PIS), PSD2 will modify the scopes of the liability for unauthorised payment transactions to be borne by payment service providers and payers.

Transfer prices - the Minister of Finance signed the Regulation extending the time-frame for preparing transfer pricing documentation
The Polish Minister of Finance – Ms. Teresa Czerwińska – signed the Regulation of 14 March 2018 on extension of the time-frames allowed for performance of some of the tax documentation-related duties.

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Romania

Legislative proposal in connection with the General Data Protection Regulation – Provisions that derogate from the European rules
The Romanian Parliament drafted a legislative proposal regarding the applicable measures for enforcing the (EU) Regulation 2016/679 issued by the European Parliament and the Council on the protection of natural persons with regards to the processing of personal data (“General Data Protection Regulation”).

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Serbia

The Ministry of Finance has published three new Rulebooks

• Rulebook on amendments and changes to the Rulebook on the contents of the tax return for the calculation of corporate income withholding tax on income and fees realized by nonresident and resident legal entities that will enter into force on April 1, 2018;
• Rulebook on amendments to the Rulebook on PP OPO tax return that entered into force on March 17, 2018; and
• Rulebook on amendments to the Rulebook on PPP PD tax return that entered in force on March 17, 2018.

Rulebook on “arm’s length” interest rates on intercompany loans
Pursuant to Article 61, para 3 of the Corporate Income Tax Law (Official Gazette RS no 25/01…112/15 and 113/17), the Ministry of Finance has adopted the Rulebook on interest rates for 2018 that are considered to be at “arm’s length”.

Rulebook on various types of services that are subject to withholding tax
The Minister of Finance has adopted the Rulebook on the different types of services based on which a non-resident legal entity generates income that is subject to withholding tax that will come into force on April 1, 2018.

Rulebook on amendments and changes to the Rulebook on the conditions and procedure for exercising the right to refund paid excise duties
Тhe Minister of Finance has adopted the Rulebook on amendments of the above-mentioned Rulebook.

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Slovakia

Cybersecurity Act
This act transposes Directive (EU) 2016/1148 of the European Parliament and of the Council and creates a legislative framework to ensure cyberspace security.

Methodological Guidance of the Ministry of Finance of the Slovak Republic No. MF/020525/2017-724 on the Mutual Agreement Procedure was published on 26 February 2018
The Ministry of Finance of the Slovak Republic published Methodological Guidance No. MF/020525/2017-724 on the Mutual Agreement Procedure.

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Previous editions

• 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)
• Central Europe Tax&Legal Highlights, July 2017 (PDF)
• Central Europe Tax&Legal Highlights, June 2017 (PDF)
• Central Europe Tax&Legal Highlights, May 2017 (PDF)