Autumn alert: news to the Country by Country reporting and last chance to the investment incentives according to the current rules
We are still observing the newly implemented obligations that apply to the Country-by-Country (CbC) reporting, for foreign tax administrator, it means reporting including important information for dividing the tax base within the firms’ group. We have contacted some of you directly in this case. In the last days, the tax administration has not only published the related forms Announcement and Report and the related directions as well as the interesting additional information from which follows:
- The CbC reporting does not apply to the EU-countries only, the companies from other countries are also obliged, which have signed a document applying to the automatic information exchange reported by multinational companies with the Czech Republic (especially the “Multilateral agreement about information exchange”)
- This law applies to corporations, where the highest entity comes from the country, with which the information exchange does not run – then, the firms’ group can choose one European company to represent it, which will report for the European members of the group
- The sum of the consolidated revenue (750 million EUR), which is the basis of the obligation for the CbC report, will be recalculated at the exchange rate of European Central Bank valid for January 2015 for Czech use
- The data should be in a united currency – in the currency of the reporting entity (the data about the exchange rates has to documented)
- The preferred language for the set-up of the report is English, though filing out the report in Czech is not a mistake
- Every Czech entity of the multinational firms’ group is obliged to submit the report until October 31st, 2017. The report is submitted only once. Should it come to point that reported data needs to be changed, it is necessary to submit a new report until the end of the accounting period to which the change applies, at the latest.
- Should the Czech entity not submit the report or break any other obligation related to the reporting, the Czech entity can face a sanction in the amount of 600 thousand CZK.
- Should the Czech entity be the highest parent entity or representative (reporting) entity of the group, it can face a sanction in the amount of 1.5 million CZK for failing to report or breaking any obligation related to the reporting.
It is necessary to know that right now is the best time to take advantage of investment incentives. The election programmes of the predominant political parties have changes or cancellations in their proposed campaigns. That is why, if you are considering some new production or expanding the current production, it is the right time to discuss this matter with our specialists.
In what form and what amount can you still get?
- A tax allowance or material support for creating a new job (200 thousand CZK) in the chosen regions or a combination both of those forms, up to the amount of 25% of the deductible costs (at least 12.5 million CZK).
- Material support related with employee requalification up to 50 % of the amount of eligible costs.
To succeed in receiving it, you need to fulfil 3 basic conditions (type of the activity – manufacturing industry, the minimal amount of investment 50 (100) million according to the regions, you have 3 years for it, after this time one half must have been invested into the new industrial equipment and a minimum of 20 new jobs should have been created). Our specialists will help you with the formal matters (it is quite an easy request). You can start your new investments with the support of the state.
After 3 years, if you find out that you have not reached the minimum sum, it does not cost you anything. We often meet companies that have invested higher sums by themselves, did not submit the requests and are needlessly paying from their own gains.
I wish you a nice read and a lucky hand, not only in the election rooms, but especially in your business – we will keep supporting you in the future.
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