ATAD Issues In The Corporate Income Tax Return

When compiling the tax return for 2020, it is necessary not to forget four new provisions, which were implemented into the Czech tax legislation already in 2019 on the basis of the initiative of the Organization for Economic Cooperation and Development. The provisions, aimed at preventing the erosion of the tax base and the transfer of profits, were created in accordance with the EU Council Directive (ATAD) and set rules for:

• Limitation of the eligibility of excessive borrowing costs,
• Taxation on the transfer of property without change of ownership,
• Taxation of a controlled foreign company,
• Addressing the consequences of different legal qualifications.

In line with the implementation of the ATAD Directive, new lines 63 and 163 have been added to the model of the tax return for 2020. What's the difference? Under the conditions stipulated by law, the economic result can be reduced by these amounts in the following periods.