Česká implementace Pilíře 2 – správní aspekty

Czech implementation of Pillar 2 - administrative aspects

An updated draft of the Czech implementation of the Pillar 2 rules, i.e. the draft law on top-up taxes for large-scale groups, has recently been published. The draft has already been submitted to the Chamber of Deputies for approval (more details HERE) and the legislative process is likely to be very fast. 

Below we bring you updated selected observations on the related administrative aspects:

The taxpayer of the top-up tax (TT), both the Czech domestic one and the allocated one (i.e. the one according to the IIR/UTPR rules), is in a simplified way the Czech member entity of the large-scale group and the foreign member entity of the large-scale group with a Czech permanent establishment.

The taxable period is generally the accounting period of the ultimate parent entity for consolidation purposes.

The administrator of the TT is generally the Specialised Tax Office.

A TT taxpayer established in a non-member State is obliged to appoint a process agent established in a member State.

There will be an exclusively electronic form of filing.

The return for a Czech TT will be filed within 10 months, while for an assigned DD within 22 months (the deadline cannot be extended).

The information return for the Czech TT will be submitted within the deadline for the submission of the Czech TT return (i.e. 10 months); the deadline cannot be extended. This information return may be filed by another Czech TT taxpayer from the same group, provided that it has the same content and is filed within the time limit (but this must be notified to the TT administrator).

The information return for the TT for the allocated top-up tax will be submitted within 15 months (18 months for the first period); the deadline cannot be extended. This return may be submitted by the ultimate parent (or designated) entity in the qualifying State, provided that it has identical content and is submitted within the time limit (but this must be notified to the TT administrator).

The details of the information return will be described in the implementing regulations.

The self-assessment regime applies.

The proposal contains specific provision for statute of limitations (and for TT collection period) for the Czech TT. In general, the statute of limitations will be 4 periods after the period in which the TT is due (the period does not run during the related court proceedings).

A corrective return for a lower TT cannot be filed in the last year of the statute of limitations.

The penalty for non-compliance of a non-monetary nature will be up to CZK 1.5 million.

If you have any questions, please contact the author of this article or the EY tax team you regularly work with.

Author:

Karel Hronek