In this newsletter we recapitulate the government measures to support entrepreneurs as per 24th March 2020. 1. Employers and employees Compensation of paid salaries The government has approved the proposals by the Ministry of Labour and Social Affairs to support employees and employers in the context of the “Antivirus” program. Through the Employment Office of…
Taxes and accounting
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Questions and answers in connection with coronavirus no. 3
21. Is it possible to work from home during quarantine? Is it possible to work whilst caring for a child? Yes, if the employee’s health (or situation concerning childcare) does not preclude this, it is possible for the employee to agree with the employer to work at home. In such a case it applies that,…
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Questions and answers in connection with coronavirus no. 2
11. We have compiled the financial statement as at 31. 12 2019 and in April we are preparing to have it approved by our shareholders. Can the shareholders decide on a payment of dividends? Yes, they can. At present, however, the Act on Business Corporations is more relevant than usually, as it has determined that…
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Questions and answers in connection with coronavirus no. 1
In connection with the current and entirely unprecedented situation, the Ministry of Finance has issued the “Ruling to Pardon Tax Accessories and the Administrative Fee due to Exceptional Events” (hereinafter to be referred to as “the Ruling of the Minister of Finance”). At the same time, we can read on the pages of the Ministry…
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Examples of Calculating the Limits of Excess Borrowing Costs
A lot of taxpayers are preparing for the application of the new rules introduced in the Income Tax Act by its latest amendment, i.e. Act 80/2019 Coll., on limiting the tax deductibility of excessive borrowing costs. Section 23e of the Income Tax Act stipulates that the amount of borrowing expenses (less borrowing income) that exceeds…
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Changes of taxation of employees subject to social and health insurance payments abroad
We would like to inform you about a recent amendment of the Income Tax Law effective since 1st January 2019. It introduces changes in calculation of the tax base for employees who are subject to social and health insurance payments in another EU country, country of European Economic Area (EEA) or Switzerland. Until the end of…
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Five Answers to Basic Questions Concerning Consolidation
1) What are consolidated financial statements? These are financial statements combining the situation concerning the assets and liabilities and the corresponding profit or loss for all group members as if they formed a single company. 2) Who is obliged to consolidate? Consolidated financial statements must be issued by groups of companies that comply with two…
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Profit Distribution Later Than 6 Months After the End of the Accounting Period
We would like to inform you about a significant change in legal expert opinion concerning the possibility of distribution of profits based on an annual general meeting decision even later than 6 months after the end of the accounting period. This is described in the second edition of the commentary to the Act on Business…
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Guideline to tax deductible interest
Rules limiting tax deductibility of interest were introduced in the Czech law on income tax in 1993 and have undergone numerous changes since then. New tax law amendment has been proposed and must be enacted in 2019. This amendment will implement some of the rules stated in the Directive (EU) 2016/1164 laying down rules against…
Exchange differences on receivables and obligations
Following the preparation of the financial statements, a number of accounting entities have questions about how to correctly manage the calculations of foreign currency receivables and obligations using the current exchange rate of the CNB. There has recently been a discussion among professionals on whether Czech accounting is in some of its provisions contrary to…