The Czech Republic is implementing DAC 6, an EU directive requiring mandatory disclosure of cross-border tax arrangements. The implementation deadline is December 31, 2019, with application beginning July 1, 2020.

Key Requirements

The disclosure rules apply to all taxes except VAT, customs, excise duty, and mandatory social security contributions. Arrangements must be reported if they qualify as cross-border and exhibit “hallmarks” indicating aggressive tax planning.

Hallmark Examples:

• Confidentiality requirements regarding tax savings
• Intermediary compensation tied to tax benefits
• Artificial use of loss-making entities

Disclosure Obligations

Intermediaries with Czech Republic connections typically bear the disclosure burden, though this may transfer to taxpayers under certain conditions. The definition of intermediary is broad, covering those who “design, market, organise, [or] manage” reportable arrangements.

Required information includes taxpayer identification, hallmark details, arrangement descriptions, implementation dates, arrangement value, and affected jurisdictions. The reporting deadline is 30 days after the arrangement becomes available or ready for implementation.

Penalties and Timeline

Violations incur penalties up to CZK 500,000 (approximately EUR 20,000). Reporting applies retroactively to arrangements with implementation steps taken after June 25, 2018.