Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

August 27, 2019

Czech Government publishes revised draft legislation on Mandatory Disclosure Rules

Executive summary

On 20 August 2019, the Czech Government published revised draft legislation implementing the European Union (EU) Directive on the mandatory disclosure and exchange of cross-border tax arrangements (referred to as DAC6 or the Directive). The revised draft legislation comes after an earlier draft published in March 2019.1 Under DAC6, taxpayers and intermediaries are required to report cross-border reportable arrangements from 1 July 2020. However, reports will retrospectively cover arrangements where the first step is implemented between 25 June 2018 and 1 July 2020.2

The Czech draft legislation is still subject to the formal legislative process (subject to approval of the Parliament and the President) and is likely to be amended before final enactment.

If implemented as currently proposed, the Czech Mandatory Disclosure Rules (MDR) legislation will be broadly aligned to the requirements of the Directive.

The key highlights of the Czech draft legislation are summarized below.

Key Highlights

  • The scope of taxes covered is not broader than the Directive.
  • The definition of reportable arrangements does not include domestic arrangements.
  • The definition of intermediaries is broadly aligned to the definition in DAC6.
  • Intermediaries are exempt from the obligation to report when obliged to maintain confidentiality pursuant to the Act on Tax Advisory, the Act on Advocacy, the Act on Notaries, the Act on Auditors, or the laws of another EU Member State to the extent that the intermediary is bound by professional confidentiality in the other EU Member State in relation to the reportable cross-border arrangement.
  • If there are no EU intermediaries which can report, the obligation will shift to the relevant taxpayer. If there is an EU intermediary but the EU intermediary is bound by the professional duty of confidentiality, the obligation will shift to the relevant taxpayer once the relevant taxpayer has been informed about the intermediary’s reporting exemption. However, the obligation will not shift to the relevant taxpayer if there is another EU intermediary not bound by the professional duty of confidentiality.
  • Penalties for failures to report are expected to apply. The Czech Tax Administrator may impose a fine on an EU intermediary or a relevant taxpayer for failure to meet a non-pecuniary obligation or a procedural fine of up to CZK 500,000 (approx. €20,000).

Next Steps

Determining if there is a reportable cross-border arrangement raises complex technical and procedural issues for taxpayers and intermediaries. Taxpayers and intermediaries who have operations in the Czech Republic should review their policies and strategies for logging and reporting tax arrangements so that they are fully prepared for meeting these obligations.

A detailed Global Tax Alert is forthcoming.


1. See EY Global Tax Alert, Czech Republic publishes draft proposal on Mandatory Disclosure Rules, dated 17 April 2019.

2. See EY Global Tax Alert, EU publishes Directive on new mandatory transparency rules for intermediaries and taxpayers, dated 5 June 2018.

For additional information with respect to this Alert, please contact the following:

Ernst & Young, s.r.o., Prague
  • Ondrej Janecek |
  • Vladimir Sopkuliak |



The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more