• Service: Tax, Mergers & Acquisitions, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 9/20/2013

Czech Republic - Deductibility of financial expenses incurred in merger 

September 20: The Supreme Administrative Court of the Czech Republic issued a decision agreeing with the taxpayer concerning the deductibility of interest and other financing expenses incurred in the tax period subsequent to the merger of two companies and related to a loan used by a company to buy shares in the target company.

A lower regional court held that the financial expenses were to generate future dividend income and as such were not tax-deductible.

On appeal, the Supreme Administrative Court agreed with the company’s argument.

Read a September 2013 report [PDF 289 KB] prepared by the KPMG member firm in the Czech Republic: Financial Update (September 2013)

Other topics addressed in the KPMG report include:

  • New law on investment companies and investment funds
  • Changes expected in real estate in 2014
  • Contracting under the new Civil Code

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