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August 27, 2019
Czech Government publishes revised draft legislation on Mandatory Disclosure Rules
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.
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