The Ministry of Finance presented a draft amendment of tax laws in connection with implementation of the European DAC 6 directive. The amendment should come into force from 1 January 2020.
The European DAC 6 directive governs the process of reporting obligation on cross-border arrangements (transactions), which are now governed by act no. 164/2013 Coll., on international cooperation in tax administration. The transactions that should be subject to reporting obligation are not defined exactly, but based on specified criteria the transactions need to be tested, and if the conditions are fulfilled, the transactions need to be reported to the tax administration. The deadline for reporting the transaction has been set at 30 days from the day the scheme is made available or ready for implementation or since the first step in the implementation has been made. Moreover, the cross-border arrangements have to be archived for 10 years. It may be subject to a fine up to CZK 500,000 in case of infringement. In case of infringement on the reporting obligation (i.e. failure to announce the cross-border arrangement), a fine of up to CZK 1.5m is suggested.
Nevertheless, the amendment continues to preserve confidentiality of tax advisors and lawyers in relation to their client, but the respective advisor (mediator), who has been familiarised with the cross-border arrangement or suggested it, must inform his client that the client is obliged to report this cross-border arrangement within the regular deadline himself (on the assumption that no other mediator, who is not subject to professional confidentiality, participates in the transaction). In case the mediator does not point out the reporting obligation to the client, he may face a fine up to CZK 500,000.