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Czech Republic Increases Transfer Pricing Oversight

by Lorys Charalambous, Tax-News.com, Cyprus

28 April 2016


The Czech tax authority has revealed that transfer pricing inspections carried out last year have resulted in additional tax assessment income of CZK450m (USD18.8m), and that an additional CZK500m was assessed in 2016.

In 2014, Czech Republic introduced an annex to the corporate income tax form to collect details about related-party transactions from certain taxpayers. The tax authority said that the information received from taxpayers enabled it to better target risky entities and transactions.

According to the tax authority, the success rate of its transfer pricing control operations increased by 31 percent compared with last year. It pointed out that the introduction of the annex in 2014 led to an increase in the overall tax liability by CZK4bn in 2014.

Last year, the Czech Republic's Specialized Tax Office undertook a nationwide control operation to scrutinize multinationals' related-party transactions to prevent the intentional or unintentional transfer of profits from the Czech Republic abroad, through the mis-allocation of taxable income between Czech-based companies and their overseas subsidiaries or an overseas parent company.

The tax authority said that it will continue its focus on transfer pricing issues.

TAGS: compliance | tax | investment | business | tax compliance | tax avoidance | law | enforcement | tax authority | offshore | agreements | multinationals | legislation | tax planning | transfer pricing | Czech Republic | tax reform | regulation | trade | business investment | Tax

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