CЕ Tax & Legal Highlights

January 2014

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

A New Transfer Pricing Guidance and the Czech Translation of the OECD Guidelines

The General Financial Directorate (the “GFD”) issued new Guidance D-34 on the application of international standards to the taxation of related party transactions. This guidance replaces existing Guidance D-332. Together with the new guidance, the Czech translation of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (2017 Edition) was published in the Financial Bulletin of the Ministry of Finance no. 5/2019.

Investment Incentives Will Have New Rules

On 7 June 2019, the Chamber of Deputies approved the government proposal of an amendment to the Act on Investment Incentives, Bulletin of the Chamber of Deputies no. 298 of 8 October 2018. The amendment can be expected to come into force approximately in September 2019. The approved amendment will represent the basic framework of conditions for awarding investment incentives. Most of the general conditions for granting investment incentives will be flexibly regulated by a governmental decree based on the economic situation and the needs of the labour market.

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Authorities’ restrictive approach to tax exemptions in the Polish Investment Zone. Change in the interpretation of the law affecting entrepreneurs operating based on a decision to provide support.

Over recent months, the Director of the National Revenue Information System has issued a number of specific tax rulings which confirm that all income coming from activities specified in a decision to provide support and carried out in the area indicated therein may be exempted from tax (up to the state aid ceiling). However, recent rulings show that tax authorities have changed their approach to the detriment of entrepreneurs.

The government adopts a bill to amend the VAT Act scrapping the obligation to submit a VAT return and turning it into JPK_VDEK

Old fiscal markings valid only for the next six months. What are the obligations of entities trading in goods required to carry a fiscal mark?

1 January 2019 saw the entry of new fiscal markings applied to tobacco and alcohol products, which significantly reduces the possibility of using the existing fiscal markings..

Withholding tax. Explanations regarding the new withholding tax rules

On 19 June 2019 the Ministry of Finance published the long-awaited explanations regarding the new withholding tax rules, i.e. the rules of collecting a lump-sum tax on cross-border payments of interest, royalty payments, dividends and payments for purchases of intangible services. Please note that these are draft explanations open for comments until 30 June.

New requirements for bond issues as of 1 July 2019

The beginning of the second half of the year will see the entry into force of the majority of regulations under the Act of 9 November 2018 amending certain acts in connection with the strengthening of the supervision over the financial market and protection of investors in this market (Journal of Laws of 2018, item 2243). The amendment will trigger significant changes in the structure of bond issues, which will become subject to severe sanctions, and impose disclosure obligations on the issuers who have issued debt in recent years. 

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International taxation and exchange of information

On 13 June 2019, Serbia has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters

II Serbia has signed the FATCA Agreement with United States of America on 10 April 2019

III During April 2019 a first round of negotiations was held in Hong Kong for the conclusion of double tax treaty between Serbia and Hong Kong.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.

MLI Developments

Malta, Ireland and Finland have deposited their instruments of ratification to the OECD.

Guidance for mutual agreement procedure related to international double taxation treaties

Serbian Ministry of Finance has recently published a Guidance on the use of the mutual agreement procedure under the double tax treaties which, is an important step in establishing and developing international tax practice in Serbia.

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Draft Changes to the Income Tax Act

New VAT Rules

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