Central Europe Tax & Legal Highlights

Albania

Second tranche of 2019 fiscal package amendments enacted
On 21 and 28 December 2018, amendments to legislation included in the second part of the fiscal package for 2019 were published in Albania’s official gazette. This article summarizes the key amendments relating to income tax, tax procedures and VAT. Other changes impact excise duties and other national and local taxes. The changes are effective as from 1 January 2019 (unless otherwise stated).

Income tax
The main objectives of the changes to the income tax law are to extend the taxable base by broadening the definition of Albanian-source income, while relieving the tax burden on certain categories of income.

Tax procedures
The key change to the law on tax procedures is the introduction of a general anti-avoidance rule. Other measures are intended to extend the range of alternative methods of tax assessment and reduce administrative and business costs.

VAT
The main objectives of the changes in the VAT legislation are to support domestic production (mainly in the agricultural and inward processing sectors), amend the treatment of advertising and introduce incentives for environmentally friendly initiatives.

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Czech Republic

Free Trade Between the EU and Japan
The Economic Partnership Agreement (EPA) concluded between the EU and Japan on 17 July 2018 will enter into force on 1 February 2019, which is surprisingly ahead of the planned date.

Ministers have Approved a Proposed Act in the Event of a No-deal Brexit
The proposed act that relates to UK nationals living in the Czech Republic has been approved by the government and sent to the parliament. The government will require that the deputies approve the act in a fast-track procedure during a single reading.

Computerisation of contact with officials
The Department of Asylum and Migration Policy continues to work on improving the efficiency of electronic communication.

Amendment to the Act on the Residence of Foreign Nationals
The amendment to the Act on the Residence of Foreign Nationals has been under discussion since June 2018. We have previously informed you about the amendment to the Act on the Residence of Foreign Nationals submitted by the government and the essential changes proposed by the amendment.

The tax package approved by the Chamber of Deputies
The Chamber of Deputies has approved the tax package as part of third reading today.

ECOFIN Discusses Digital Services Tax
One of the agenda topics discussed by the ECOFIN Council during its meeting of 3 December 2018 was the proposal on the taxation of digital services.

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Hungary

Positive changes in training grant regulations
Amendment to NGM Decree no. 3/2015. (II. 13.) containing among others the detailed rules of training grants available through the Training Fund of the Hungarian Employment Fund entered into force on December 23, 2018.

Tax savings opportunities in the pharma sector
In our experience, due to uncertainties in interpretation companies often miss opportunities that would have led to considerable savings, potentially in several tax types. Please note the opportunities below that are open to pharmaceutical companies and do not hesitate to contact us for further details.

Minimum wage increase: good for students, bigger company gifts, increasing tax-exempt benefits
In addition to the higher pay, the increased amount of the minimum wage has a number of other advantages. For instance, it allows for more expensive gifts at year-end parties and better seats on stadium stands for sport fans. Deloitte Hungary collected potential benefits for employees and employers.

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Kosovo

The Ministry of Finance has approved the Administrative Instruction on the matter for national risk assessment on money laundering and terrorist financing
The Ministry of Finance has approved this Administrative Instruction with the intention of regulating the procedures for national risk assessment. By obliging public institutions and “Reporting Entities” as categorized by the Law on Prevention of Money Laundering and Fighting Terrorism Financing, the Ministry has taken steps to insure full compliance with the Law on the Prevention of Money Laundering and Combating Terrorist Financing.

The Ministry of Trade and Industry approved an Administrative Instruction that obliges retailers to place the flag of the origin of the product on the label of the product
The Ministry of Trade and Industry has decided to obligate all of the retailers within the Republic of Kosova to identify the origin of a product by placing the flag of origin on products.

Tax Treaty between the Republic of Kosovo and the Republic of Austria enters into force
The tax treaty has entered into force on 28 December 2018 and is applicable as from 1 January 2019.

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Lithuania

The draft law amending and supplementing the Lithuanian Labour Code was registered
On 22 January, the draft law amending and supplementing the Lithuanian Labour Code was registered. The main aim of the afore-mentioned draft law is to impose the obligation to the employers to indicate the salary in the job advertisement.

On 1 January the Law on Protection of Whistle-blowers entered into force
On 1 January the Law on Protection of Whistle-blowers entered into force with the aim to strengthen the whistle-blowers protection in Lithuania.

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Poland

Important changes in PIT since 2019
At the end of 2018, the President signed a number of acts introducing changes to the Act on personal income tax. We present the most important changes broken down by topic groups.

Social consultation regarding JPK_VAT (SAF-T for VAT) completed
At the end of December, the Ministry of Finance published technical requirements regarding the new JPK_VAT scheme, aka JPK_VDEK statement.

Can passenger cars fuelled with electricity, hydrogen and plug-in hybrids be exempted from the excise duty?
Pursuant to communications published by the Ministry of Finance and Ministry of Energy on their websites, on 18 December 2018 the European Commission provided the Polish side with its opinion, according to which the provisions of the Act on Electromobility and Alternative Fuels of 11 January 2018 (the “Electromobility Act”) introducing excise exemption for electric, hydrogen-fuelled and hybrid plug-in cars are not classified as public aid.

Mass inspection of Standard Audit Files for Tax. Analytical tools used by tax authorities to inspect SAF-T
Based on a report prepared by the Supreme Audit Office (NIK), SAF-T submitted by businesses in the period form January to September 2018 provided the Ministry with information regarding over 4 billion invoices. Following an automated analysis of the files, the Ministry picked up 194,000 suspicious invoices that will be subject to further explanation. These invoices were issued by 73,000 entities and total PLN 378 million. Since the SAF-T effective date, National Tax Administration Bodies have analysed 10 billion invoices issued by businesses operating in Poland.

50% tax deductible expenses and copyright transfer
The recent draft ruling clarifies a number of doubts and gives rise to new ones, regarding employment contracts that include copyright transfer clauses.

Amendments to labour law in 2019
The beginning of 2019 saw a number of amendments to the labour law. Some existing solutions shall undergo material changes. New ones shall be introduced, including Employee Capital Plans. Below please find a list of the key amendments.

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Romania

Legislative measures with major impact approved by GEO at the end of last year
The Government has approved the Emergency Ordinance no 114/2018 which introduces a series of legislative changes with impact on the financial services, electricity, gambling, telecommunications, amongst others.

EU-Japan Free Trade Agreement will enter into force on the 1st of February, 2019
Signed on 17th of July at Tokyo, the FTA will reduce or remove most part of the customs duties applicable for the trade of goods originating from the two territories. Registration in the REX system is necessary in order to be able to issue the proof of origin.

The amendments to the Tax Code and the Fiscal Procedure Code
A series of amendments, completions are introduced by Law no. 30/2019 published at January 17, 2019.

The EU alarm signal on computation of goods origin
Almost 40% of EU exporters face difficulties in performing computation of goods origin and 70% have difficulties in obtaining the supplier declaration, shows a study performed by the European Commission in 2018 on origin rules application at exporter level.

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Serbia

Social Security Agreement between Serbia and Switzerland
Social Security Agreement as well as Administrative agreement on implementation of the Social Security Agreement concluded in 2010 between Serbia and Switzerland, has entered into force on 1st of January 2019. Convention on social security from 1962 and additional Convention from 1984, which was regulating relations regarding social insurance, ceases to be applicable from the date of entry into force of the Agreement.

The Central Register of the Beneficial Owners
The Central Register of the Beneficial Owners has been established within the Serbian Business Registers Agency as of December 31, 2018, as a unique, centralized, public and electronic data base about beneficial owners of subjects registered, established until December 31, 2018, in accordance with the Law on the Central Register of the Beneficial Owners and the Rulebook on the content of the Central Register of the Beneficial Owners.

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Slovakia

Act on Rules for Resolution of Tax Disputes
The National Council of the SR passed the definite wording of the government act regulating double taxation and resolution of disputes between the SR and other states concerning the avoidance of double taxation.

Information on Extension of the Scope of Employment Income Exempt from Tax to Include Income Paid during Summer Holidays (13th Salary) and Christmas (14th salary) in 2018
The Financial Directorate issued information on extending the scope of employment income exempt from tax to include income paid during summer holidays and Christmas in 2018.

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Previous editions

• Central Europe Tax&Legal Highlights, December 2018 (PDF)
• Central Europe Tax&Legal Highlights, November 2018 (PDF)
• Central Europe Tax&Legal Highlights, October 2018 (PDF)
• Central Europe Tax&Legal Highlights, September 2018 (PDF)
• Central Europe Tax&Legal Highlights, August 2018 (PDF)
• Central Europe Tax&Legal Highlights, July 2018 (PDF)
• Central Europe Tax&Legal Highlights, June 2018 (PDF)
• Central Europe Tax&Legal Highlights, May 2018 (PDF)
• Central Europe Tax&legal Highlights, April 2018 (PDF)
• Central Europe Tax&Legal Highlights, March 2018 (PDF)
• 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)