The Specialized Tax Office initiated a nationwide controlling operation focused on transfer pricing at multinational corporations
The Specialized Tax Office initiated controlling operation in order to verify the correctness of setting the transfer pricing between companies that are personnel or property related. The main aim of the operation is to prevent possible tax evasion.
The tax office effort is to prevent intentional or unintentional transfer of profits from the Czech Republic abroad. This may occur through transactions between members of the multinational enterprise groups or through wrong distribution of profit between the Czech subsidiary and parent foreign company.
The control operation was divided into several phases. Within the first phase that was held at the turn of January and February, the tax inspections were focused solely on the transfer pricing at the selected tax entities. Other phases of these specific controls will follow.
The tax entities are chosen for control due tothe analysis of data gained from questionnaire voluntary filled in by tax entities last year and from data obtained by searching activities of the Specialized Tax Office.
The Specialized Tax Office is a part of the Financial Administration of the Czech Republic. It is a closely profiled tax office that administers fiscally leading Czech companies with annual turnover over CZK 2 billion, as well as banks, insurance companies and other financial institutions. The control over correct transfer pricing is one of the priorities of the control activities of the Specialized Tax Office.
