Central Europe Tax&Legal Highlights

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Central Europe Tax & Legal Highlights

May 2019

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.

Czech Republic

Digital tax in the Czech Republic

At the end of April 2019, the Ministry of Finance of the Czech Republic announced its intention to introduce a draft bill on taxation of income from digital services by the end of May 2019. The Ministry seeks to start collecting tax on digital services in the Czech Republic in mid-2020.

When do Businesses become Entitled to Interest Paid by the Tax Administrator

Businesses often find themselves in a situation where they become entitled to interest as a result of the tax administrator’s actions or negligence. However, in practice, we often come across cases where the tax administrator does not pay the interest to the taxpayer at all or pays an amount that is lower than the one to which it is entitled by law or based on the administrative courts’ judicature. When should the entitlement to interest be claimed then?.

The Supreme Administrative Court on (in)dependence and (non)creation of permanent establishment

The Supreme Administrative Court cancelled a rather disputable decision of the Regional Court in České Budějovice issued at the beginning of last year on the grounds of its unreviewability. It also stated several significant facts in its ruling (ruling 2 Afs 103/2018 – 46) regarding the approach to assessing the criterion of an agent’s dependence, ie, the role of commentary in interpreting the Double Tax Treaty.

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Kosovo

The Republic of Kosovo and the Republic of Malta have signed a Double Tax Treaty

The tax treaty has been ratified by Kosovo’s parliament and has been duly promulgated by Kosovo’s President, and awaits ratification from the Maltese authorities. Once ratified, it will be applicable as from 1 January of the following year.

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Poland

Statement on non-payment of withholding tax or application of preferential WHT rate. Are you ready to sign it?

The most important WHT regulations are just around the corner - they take effect as from 01 July 2019. The Ministry of Finance has recently published interactive electronic WHT returns. The statement to confirm meeting the conditions for non-payment, exemption or preferential rate of WHT (WH-OSC) calls for particular attention.

A new regulation on cash registers - changes also to apply cash registers now in use

A new regulation of the Minister of Finance of 29 April 2019 on cash registers was announced on 30 April 2019. It concerns both the cash registers that are currently used and online cash registers. As per the regulation, the majority of the new rules came into force on 01 May 2019.

Planned changes to the list of excise goods. Reintroduction of excise duty and transportation package (SENT) obligations for products falling within CN code 3824

The governmental legislative work on the so-called "fuel package 2.0", i.e. the Act amending the VAT Act and some other acts (hereinafter: "Draft" or "Draft Act"), is now in progress. According to the current wording of the proposed regulations, as of 1 July this year certain products falling within CN code 3824 once again will be classified as excise goods. Apart from the obvious consequences arising from the excise duty regulations, this change will also impact the obligations linked with monitoring the transportation of goods under the SENT system (Transportation package).

Excessive loss exempt from excise duty also before 19 September 2018. Supreme Administrative Court's ruling

The grounds for the judgement of the Supreme Administrative Court (NSA) of 20 February 2019 were published a few days ago. In the judgement the Court holds that imposing taxation on natural losses that exceed the acceptable standards established for a given entity is in breach of Article 7(4) of Directive 2008/118/EC.

Possibility of extending tax exemption to all income on the basis of the support decision. Favourable interpretative practice for entrepreneurs operating within the Polish Investment Zone

The Director of National Fiscal Information Service has recently issued a number of individual tax rulings that confirm the possibility of exempting from income tax, on the basis of the decision on support, of all income derived from the activities specified in the relevant support decision and conducted in the area indicated therein, up to the limit of the state aid granted.

GDPR: Sector-specific legislation is already in force! General changes introduced by the Act, changes to the Act on Insurance and Reinsurance Activity and the Act on Consumer Rights

Sector-specific legislation implementing GDPR entered into force on 4 May 2019. Its main task is to align nearly 170 acts of law with the requirements of the EU data protection regulation. What changes to expect?

Directive that protects whistleblowers

On 16 April 2019 the European Parliament voted in favour of an EU law to protect whistleblowers. Now member states are obliged to implement its provisions in their national legal systems. 

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Romania

Amendment of Law no. 10/1995 on construction quality by inserting new obligations incumbent to the investors and building owners

The President of Romania has promulgated on May 7, 2019 the Law no. 97/2019 regarding the amendment of Law no. 10/1995 on construction quality. The notable change is that operating buildings prior to the reception upon termination of construction works is deemed a contravention sanctioned with a fine.

Amendments to the Tax Code

On May 23th 2019, the Emergency Ordinance supplementing Law 227/2015 on the Tax Code was published. The applicability of the reduced VAT rate of 5% was extended to mountain, bio and traditional food. The amendment enters into force as of June 1st, 2019.

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Serbia

Law on Amendments and Changes of the Law on Foreigners

Law on Amendments and Changes of the Law on Foreigners was published in the Official Gazette no. 31/2019, on April 29, 2019. Law entered into force on May 7, 2019, however the most important amendments will be applicable as of January 1, 2020. 

Law on Amendments and Changes of the Law on Employment of Foreigners

Law on Amendments and Changes of the Law on Employment of Foreigners was published in the Official Gazette no. 31/2019, on April 29, 2019. Law entered into force on May 7, 2019.

Position of the Tax Administration regarding the control of the fulfillment of conditions for reimbursement of commuting costs

Recognition in the tax balance sheet of expenses that include computed value added tax.

Annual Tax Audit Plan for the year 2019

The Annual Tax Audit Plan for the year 2019 has been published on the Tax Administration website.

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Slovakia

Higher Supplements for Public Holiday and Weekend Work
 

Proposal to Increase the Meal Allowance for Business Trips

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