September 27, 2018 2 min read
The Czech Republic has seen a significant progress in the fight against tax evasions in recent years and thus has also gotten better at collecting VAT. This has been confirmed by the latest study of the European Commission, where the gap between the expected and actual collection of VAT shrunk by 10 billion CZK to 58,5 billion CZK in 2016, that is from 17% to 14%. The average in the European Union for the year 2016 was 12,3%. In comparison to our neighbouring states, the Czech Republic is faring much better, e.g. in Poland the gap in 2016 was 21% and in Slovakia 26%. The best results are shown by Luxembourg, Switzerland and Croatia whose gaps are only 1%.
In its judgment of February 9, 2026, case no. 57 Af 6/2025-57, the Regional Court in Plzeň addressed the transfer pricing setup of a Czech contract manufacturer that had drawn a loan from a related party.
In judgment 8 Afs 173/2024-121 of August 7, 2026, the Supreme Administrative Court (hereinafter the "SAC") dismissed the cassation appeal filed by Mountfield and upheld the conclusions of the tax administration and the regional court, according to which the company abused the law by establishing a structure related to the early settlement of its liabilities arising from the purchase of trademarks.
In late July, the Chamber of Deputies approved a bill referred to as EET 2.0. On August 19, 2026, the Senate debated the bill and returned it to the Chamber of Deputies with amendments.
In June, Coordination Committee contribution No. 636/25.02.26, Application of VAT to Activities under a Planning Agreement, was published, along with the conclusions of the General Financial Directorate (GFD) regarding the matter (for more details, see CONTENTS).
Are you considering establishing a VAT group (or modifying an existing one) so that it is registered effective January 1, 2027?
If you paid local VAT on purchased goods or services in any EU country in 2025 and used these supplies for your business activities, you can apply for a VAT refund.
Effective July 1, 2026, an amendment to Act No. 589/1992 Coll., on Social Security Contributions and State Employment Policy Contributions, enters into force, altering the rules for calculating minimum social security advance payments for self-employed persons (OSVČ) engaged in a primary activity.
Proposed Amendments to the VAT Act: Further Simplification for Trading within the European Union
The Supreme Administrative Court Broadens the Interpretation of Related Parties for Thin Capitalisation Purposes
The OECD has published a draft update to Chapter VII of the OECD Transfer Pricing Guidelines, focusing on intra-group services.
