Central Europe Tax&Legal Highlights


Central Europe Tax & Legal Highlights

November 2017

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.

Bosnia and Herzegovina

Amendments to the Companies Act of Republic of Srpska
The Act on Amendments to the Companies Act (“Act”) was published in the “Official Gazette of RS”, number 100/17 on 3 November 2017. The Act enters into force on 10 November 2017.

Taxpayers of the Federation of Bosnia and Herzegovina in the period January-October 2017 paid 3.977.813.673 BAM of direct taxes, contributions and fees
The Tax Administration of FBiH has published that the taxpayers of FBiH in the period from January to October 2017 have paid 3.977.813.673 BAM of public revenue for which the Tax Administration of FBiH is competent, which is 348.769.099 BAM more than in the same period in 2016 i.e. more than 9,61%.

The draft Bankruptcy Act was adopted in FBiH
On October 31 the 125th regular session of the Government of FBiH was held and, among other things, the draft Bankruptcy Act was adopted and sent to the parliamentary procedure.

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Instructions on the format and method for submission of the country reports and notification
On 25 October 2017, the Executive Director of the NRA issued an Order (Order No. 1410), containing instructions on the format and method for submission of the country reports and notification.

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Amended reporting rules of multinational enterprise groups country by country report
On 2 November 2017 the Order No. VA-93 issued by the Director of The State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania (hereinafter – STI under MF) has changed a previous Order No. VA-47 regarding the reporting rules for the multinational enterprise (hereinafter – MNE) groups also known as Country-by-Country (hereinafter – CbC) reporting rules in Lithuania.

Agricultural companies and cooperative companies will have to provide information about their participants to the administrator of information system on participants of legal entities (hereinafter – JADIS)
On 16 November 2017, there were adopted amendments to the Law on Agricultural Companies of the Republic of Lithuania and the Law on Cooperative Companies (Cooperatives) of the Republic of Lithuania stipulating that agricultural companies and cooperative companies will be required to provide JADIS with information about the participant of the agricultural company or cooperative, the date of the person's admission to the participants, the size (when the contribution is monetary) and/or value (when the contribution is non-monetary) of the participant’s contribution, also the expiration date of membership.

The Bank of Lithuania presented its position on the distribution of virtual currencies and initial coin offering
On 10 November 2017, the Bank of Lithuania has issued requirements that financial market participants should comply with. Nevertheless, this position can not be considered as an official interpretation of the law.

The part of applicable requirements for purchasers of agricultural land plots has been waived
On 23 November 2017, amendments to the Law on Acquisition of Agricultural Land were adopted

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Legal and water evaluation - a new instrument under the Act: Water Law
The amending Act to the Water Law, which was passed in the summer, is to take effect beginning from 01 January 2018. The new legislation incorporates many changes to the Water Act and introduces some new instruments that will affect water management in Poland. Among them, there is legal and water evaluation which - we believe - should be analysed in a greater detail, considering its impact on the investment process and, in certain cases, the need to obtain it.

Green light for cross-border transformation of Polish companies
On 25 October 2017 the EU Court of Justice issued a decision that would be consequential for Polish enterprises. The CJ's judgement regarding case: C-106/16 concerns non-compliance of the provisions of the Code of Commercial Companies and Partnerships (CCCP) with the EU freedom of establishment rule insofar as the CCCP requires the winding-up of the company in the case of taking the decision to transfer the registered office to a Member State other than the Republic of Poland.

Implementation of amended provisions of the Act on disclosure of information and exchange of economic data. Changes in the operation of the Economic Information Bureau.
The amended provisions of the Act on disclosure of information and exchange of economic data came into force on 13 November 2017. They will affect some of the procedures linked with registering contractors with Economic Information Bureaus ("EIB”). In addition, the range of the "services" offered to potential creditors by Economic Information Bureaus has been extended.

Draft Act on transparency in public life
On 25 October 2017, the draft Act on transparency in public life was tabled for interministerial discussions and submitted for public stakeholder consultations. The first draft shows the direction that the planned changes are bound to take. Considering their complexity and potential implications, it is worthwhile to get prepared for the new laws in advance.

Amendments to the Act on the social insurance system
The Council of Ministers approved draft amendments to the Act on the social insurance system

Act on transparency in public life may complicate the lives of employers
The Government Legislative Centre has published a modified draft Act on transparency in public life which, in a sense, constitutes a response to the fast-track public stakeholders consultations. Even though the title given to the Act does not suggest it, the Act will considerably affect the businesses of employers, also those operating in the private sector.

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Combined Nomenclature for 2018
The European Commission has recently published in the Official Journal the Combined Nomenclature applicable starting 1 January 2018. As a consequence, starting this date, it will be necessary to use the new CN codes for customs operations, Intrastat declarations and for operations performed on the basis of the customs and fiscal authorizations issued based on the CN codes in 2017.

On October 3 2017, Article 29 Working Party , in view of ensuring harmonized application of the Regulation regarding Protection of Personal Data starting by 25 May 2018, adopted the following guidelines:
• Guidelines on the application and setting of administrative fines for the purpose of the Regulation 2016/679
• Guidelines on personal data breach notification under Regulation 2016/679
• Guidelines on automated individual decision-making and profiling for the purposes of Regulation 2016/679

Customs duties reduced by 50% on imports of GoPro Hero cameras and similar products
Recently, the European Commission repealed a Regulation that classifies GoPro Hero cameras at a tariff code that stipulated a 7% duty on imports into the European Union. As a result of the reclassification, the applicable customs duty was reduced by 50%.

Amendments to the Fiscal Code
The Law no. 227/2015 regarding the Fiscal Code has been amended by the Emergency Ordinance no. 79/2017, published in the Official Gazette no. 885/10.11.2017.
The changes will enter into force starting with 1 January 2018. The main amendments include:
• Limited deductibility of interest and other costs economically equivalent to interest for corporate income tax purposes
• Amendments of the conditions applicable to the microenterprise regime
• Decrease of the salary income tax to 10%
• Mandatory social security contributions rates due by the employee and the employer for salary income were amended
• Amendments of the mandatory social security contributions rates and of the computation base cap related to independent activities. Moreover, we believe that CJEU decision opens the right to deduct VAT also for other cases where VAT deduction was blocked because the supplier had its VAT number cancelled.

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Information on the Tax Bonus for a Child Studying Abroad
The Financial Directorate of the Slovak Republic published information on the tax bonus for a child studying abroad.

Adoption of IFRS in the EU
On 31 October 2017, the EU adopted new IFRS 16 Leases and Clarifications to IFRS 15 Revenue from Contracts with Customers. On 3 November 2017, the EU adopted Amendments to IFRS 4 Insurance Contracts: Applying IFRS 9 with IFRS 4. On 6 November 2017, the EU adopted Amendments to IAS 12 Income Taxes: Recognition of Deferred Tax Assets for Unrealised Losses and Amendments to IAS 7 Statement of Cash Flows: Disclosure Initiative.

Amendment to Act No. 563/2009 Coll. on Tax Administration (The Tax Code)
An amendment to the Tax Administration Act which introduces a number of changes was published in the Collection of Laws. The amendment amends the tax secrecy obligation and introduces the tax reliability index and other new measures to combat tax evasion.

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