K34 - Tax LawReturn

The paper describes the influence of a tax law on the technical reserves recorded by the Czech and Slovak insurance companies. Specifically using technical reserves to insurance payments respectively to liabilities ratio it verifies whether the rules covered by the respective tax law might have influence the values of the technical reserves created. The Czech and Slovak insurance companies were chosen due to their different tax regime for the whole analyzed period (2010 – 2018). Whereas the Slovakia linked the amount of tax deductible technical reserves to the Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009, the Czech tax law allowed to deduct from the corporate income tax base any value reasonably justifiable. The results of the statistical analysis indicate influence of the tax regime of the technical reserves deductibility as the Czech insurance companies were achieving significantly higher values of the technical reserves to insurance payment ratio in comparison to the Slovak insurance companies where the tax regime had been stricter.

National and European tax legislation deals with the notion of proper economic reasons for mergers. The aim of this article is to link the economic and tax perspective on the implementation of mergers of companies and in this framework to characterize the basic rules for assessing mergers of companies in terms of tax law in practice. The economic and tax perspective is connected on a model example, on which the main methodological procedures for the assessment of mergers are presented. The connection between the two areas has led to clear conclusions for tax practice. It follows from the application of the so-called principle of abuse of law that it is necessary to assess the proper economic reasons for a merger only if it is clear that there is a tax motive for the implementation of a specific merger. This view could not have been previously applied due to a specific, inappropriate regulation in national legislation.From the conclusions of the basic economic models of oligopolies, it can be concluded that for mergers of related companies can not lead to economically relevant cost savings. The argument of cost savings as a proper economic reason for the merger of related companies is thus not possible in tax practice.The article further outlines that for mergers of related companies there may be a so-called institutional or conditional reason for the merger, which could be considered as the only proper economic reason for the merger of related companies. Verification of the application of a similar principle can be recommended for further research.

Major part of multinational companies from the whole world is facing the problems connected with the valuation of goods in the international business. Transactions between related parties are subject to examination guided with different rules and contradictory interests of both customs and fiscal authorities. This article makes an attempt to describe basic problems and propose some resolution which should be in the interest of all concerned.

The paper deals with selected changes in Czech legal regulations in the area of international taxation of incomes from employment in the period 1993-2012. Authors pay attention to some provisions of the Act on Income Taxes that govern taxation of Czech tax resident who acquires foreign income from employment. The main focus is concentrated above all to domestic legal regulation, however, there is a marginal space granted also to the some aspects on the level of international and European Union law. Concerning domestic legal regulation, authors primarily deal with the history in legal regulation of natural persons´ tax residency according to Act on Income Taxes. The stress is put on introduction and assessment of changes specific for incomes from employment. Subsequently, there is treated a history in the conception of partial tax base from employment having its source abroad. For comprehensible reasons, the attention is given to the issue of double taxation avoidance putting stress on Sec. 38f para. (4) of the Act on Income Taxes. In relation to last mentioned, there are presented outputs of mathematical models describing a dependence of tax-payer´s tax liability on a share of foreign income (partial tax base - incomes from employment) in total tax base.

This paper investigates the tax harmonization in the European Union in the context of the Economic Crisis. The aim is to analyze an evolution of taxes with the greatest harmonizing tendencies. Two of them are indirect taxes - VAT and excise tax, and one is direct tax - corporate income tax. In the paper, the main basis of the harmonization process and basic legal standards are summarized. The paper concludes that harmonization of these taxes can be divided into two areas. It is quite successful in the area of indirect taxes, the former turnover taxes were replaced by the value added taxes, and the EU member states have also found agreement about excise duties which should be used. On the other way the area of direct taxes is very sensitive and a lot of initiatives of the Commission were abolished due to different national interests. During the Economic Crisis a new need for tax harmonization has arisen, especially for further coordination of the chosen taxes.

The article deals with the possibility of taxing the company plans to expand abroad through cross-border mergers. They discussed two alternatives fiscal relations - establishment of a subsidiary company for the use of losses incurred by subsidiary companies to reduce the tax base of the parent company. The second alternative examines the application of the losses incurred during the existence of branches abroad. Income tax advantages that may be gained in cross-border merger were implemented by virtue of Directive 90/434/EEC. The Income Tax Act allows Czech successor companies to take over tax losses that were incurred by foreign merging companies and that have not been used yet. At this point, tax advantages could be at least described as problematic or even unattainable.