Czech Republic: Proving internet advertising expenses

To prove internet advertising expenses claimed in tax return, taxpayer must present screenshots or administrator account

Proving internet advertising expenses claimed in tax return

The Supreme Administrative Court issued a judgment regarding internet advertising expenses—both in terms of their deductibility for income tax purposes and the right to deduct value added tax (VAT).

The court considered whether the taxpayer had provided sufficient proof of the claimed advertising expenses for advertising that took place on the internet and whether the expenses relating to this advertising could be claimed as deductible.

The court agreed with the tax authority that the taxpayer had failed to prove the delivery and receipt of the advertising using one of the two ways to record and prove that the advertising on the interest had taken place—either a screenshot or the administrator account from which the internet advertising was arranged. During the proceedings, the taxpayer submitted several types of evidence. The taxpayer submitted screenshots that were found to be neither distinct from each other nor dated, and thus were insufficient to prove the tax deductibility of relevant advertising expenses.

The court considered it necessary for the taxpayer to provide documentation not only in form of statements containing records of the number of searches and the number of times the website was opened, but also in form of screenshots capturing the advertisement directly from the internet search engine.

The case identifying information is: 10 Afs 74/2020-50

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

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.