The 2019 tax package (having been subject to a comment process since February 2018) is reportedly about to be submitted by the government. The Ministry of Finance has added a new proposal to require taxpayers to report income transferred abroad and to clarify the “abuse of right concept.”
The new requirement to report income transferred abroad would replace a current reporting requirement of withholding tax and would further extend the scope of reportable payments. Taxpayers would report not only payments to foreign entities from which tax was withheld but also would report transactions generally subject to withholding tax but that might be exempt from tax in a particular situation because of legislative or income tax treaty provisions.
Income payments flowing abroad that were not taxed would have to be reported if they exceed a threshold amount. An explanatory report mentions foreign dividends, but in practice, the new reporting requirements might be much broader and apply not only to dividends, royalties, and interest paid abroad but also to “gratuitous income.”
The Ministry of Finance also plans to introduce another measure to address certain tax-optimisation structures.
Read a June 2018 report prepared by the KPMG member firm in the Czech Republic
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