Top-up taxes – recent developments

Czech forms

In June 2025, the Ministry of Finance of the Czech Republic published a draft Decree on form submissions for top-up taxes as part of the inter-ministerial comment procedure.

This Decree contains both the form of the return for the Czech top-up tax and the form of the information summary, which should be used both for the assigned top-up tax and for the Czech top-up tax.

The forms and the instructions for filling them in are based on the assumption that the draft amendment to the Czech law on top-up taxes, which is now in the Czech Senate (see our earlier information here), will be approved.

The Czech top-up tax return should be submitted in xml format. The specific format, i.e. whether it will be a form to be filled in within the Electronic Filing or just a defined xml structure (similar to the one used for e.g. Country-by-country reporting or for the purposes of the reporting obligation under DAC 7), is currently not yet decided.

The tax return form is divided into 5 sections (taxpayer details, group details, tax return for the Czech top-up tax, tax return for the assigned top-up tax and additional tax return for the Czech / assigned top-up tax).

The information overview form essentially corresponds to the information overview template contained in the amendment to the EU Directive on administrative cooperation in the field of taxation (DAC 9). The instructions for completing the information overview form refer to the OECD template published in January 2025.

The above is only a confirmation of what was mentioned earlier, i.e. OECD interpretations, although not legally binding, are used to interpret the issue of top-up taxes.

The decree on the form submissions for the top-up taxes is therefore in the comment procedure. Once the comment procedure is completed, the final form of the decree will be prepared and published in the Collection of Laws.

Opinion on the suspension of the EU Assigned Top-up Tax

On 6 June 2025, CFE Tax Advisers Europe, the association representing European tax advisers, submitted a position paper to the EU institutions requesting a temporary suspension of the Pillar 2 cross-border rules (i.e., essentially suspending the application of the assigned top-up tax) while domestic, national top-up taxes would apply. CFE Tax Advisers Europe argue that EU countries (which have to apply the Pillar 2 rules under the EU Directive) are at a disadvantage compared to some non-EU countries (e.g. USA, China, India).

We are not yet aware of any reaction from the EU institutions.

Developments with regard to the USA

In late June, the U.S. Treasury Department announced an agreement with six other G7 countries (i.e., Canada, France, Germany, Italy, Japan, and the United Kingdom) under which U.S. companies would be excluded from the imposition of any Pillar II taxes in exchange for the removal of a proposed new Section 899 from the budget reconciliation bill known as the “One Big Beautiful Bill” (OBBB) currently before Congress.

New Section 899 would impose a retaliatory tax on certain non-U.S. corporations and individuals if their home jurisdiction imposes taxes on U.S. taxpayers that are deemed discriminatory or extraterritorial. Such taxes could potentially include a tax imposed under the undertaxed profits rule (UTPR).

On the other hand, the EU has in place the Top-up Tax Directive, which makes it mandatory for EU Member States to implement the second pillar rules, both the Inclusion of Profits Rule (IIR) and the Undertaxed Profits Rule (UTPR).

It is therefore uncertain how EU countries would apply the above-mentioned agreement with the US. We will continue to monitor developments in this area.

If you are subject to or interested in the regulation of top-up taxes, please do not hesitate to contact our specialists.