Czech Republic: Information on claiming uncertain tax losses

The new provision has been incorporated into the Income Tax Act with effect from 1 July 2020.

The new provision has been incorporated with effect from 1 July 2020.

The General Financial Directorate has issued information on the application of a special provision on claiming uncertain tax losses.

Section 38zh of the Income Tax Act allows taxpayers to file an additional income tax return claiming a tax loss as deductible from the tax base while the loss has not yet been finally and conclusively determined. The provision introduces a fiction whereby the additional tax return is deemed to have been filed on the date on which the tax loss was finally determined. The taxpayer therefore claims the tax loss prematurely and assumes that the tax loss will be finally determined in the amount claimed.

The new provision has been incorporated into the Income Tax Act with effect from 1 July 2020 and can be applied to losses for taxable periods ending on or after 30 June 2020. However, taxpayers need not use the fiction provided for by section 38zh and can claim the loss as a deductible item after it has been finally/conclusively determined.

Read a January 2022 report prepared by the KPMG member firm in the Czech Republic

 

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