Czech Republic

Corporate - Significant developments

Last reviewed - 20 July 2020

From 2020, the following measures transposing the European Union (EU) Anti-Tax Avoidance Directive (ATAD) have come into effect:

  • Hybrid mismatches, effective for tax periods commencing on/after 1 January 2020.
  • Exit taxation, effective for tax periods commencing on/after 1 January 2020.

The rest of the ATAD rules became effective in April 2019, i.e.:

  • Interest deduction limitation rule, effective for tax periods that commenced on/after 1 April 2019.
  • Controlled foreign company (CFC) rules, effective for tax periods that commenced on/after 1 April 2019.

There are also certain tax measures that were released in order to mitigate the financial effect of COVID-19, such as postponement of the 2019 tax returns filing deadline to 18 August 2020, waiver of certain tax penalties, and others. Further changes of the tax law are in the approval process to become effective from 2021 (the main change is loss carryback for two years). More details about all measures can be found at: https://www.pwc.com/cz/en/temata/covid-19-pravni-a-danovy-servis.html