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| June 8, 2021

Financial Administration assessed additional taxes reaching CZK 1.4bn during transfer pricing audits

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At the beginning of June, the Financial Administration published the results of the statistic of audits relating to transfer pricing between related parties for the period of the year 2020. The total amount of additional assessed tax was the highest since 2012 and reaches nearly one quarter of the entire amount additionally assessed in transfer pricing since 2014. The amount of raising the tax base including a lowering of loss is also significant. It is interesting to note that since 2014, a total of 2431 audits focusing purely on transfer pricing took place.

It needs to be accentuated that the problems with the state budget deficit will surely need covering on the income side. Given the fact that the issue of transfer pricing relates closely to the issue of international taxation and especially the taxation of large multinational corporations in general, the trend of audits of international taxes and especially transfer pricing can be expected to intensify in the upcoming years rather than calming down. The final sentence of the press release actually suggest as much:

The issue of transfer pricing is perceived as a high-risk area globally and is often used by multinational groups for aggressive tax planning and frequently also for tax evasions.