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Tax audits will be aimed at transfer prices

Sdílet

A new attachment of the tax submission form will help to gather all requisite information.

On the occasion of tax audits performed by Tax Offices and their territorial branches, the General Financial Directorate intends to aim to control of transfer prices for transactions between personnel or property-related parties.

A voluntary questionnaire has been sent to selected tax subjects during this year. Gathered information helped the Tax Offices to get a situation overview of tax subjects and transactions with related parties.

Similar information concerning transactions with related parties shall be part of the Attachment of the Corporate Income Tax for the taxable period 2014.

The obligation to fill out the attachment will have taxpayers meeting at least one of the following criteria:

a) total assets of value over CZK 40 million, 
b) the net turnover of more than 80 mil. CZK, 
c) average FTE number of employees over 50,

provided that they:

  1. realized a transaction with related party seated abroad. The attachment shall be filled out only with respect to those foreign related parties;
  2. reported a tax loss and realized transactions with related party (foreign or domestic). The attachment shall be filled in respect with all related parties;
  3. are recipients of investment incentives in the form of tax relief and realized transactions with related party (foreign or domestic); The attachment shall be filled in respect with all related parties.

The data obtained will be used by the Financial Administration of the Czech Republic in risk-analysis when selecting subjects for a tax audit. Thanks to this, the transfer pricing controls shall be better targeted and less tasked for taxpayers who have their transactions with related parties well‑documented and adjusted according to the law and international arm’s length principle.