The exemption from VAT for supplies of goods from Germany to other EU member states is linked to the existence of a document called „Gelangensbestätigung“ in the case of transport of goods by a customer‘s own means of transport. When an amendment to the German VAT law took effect on 1 October 2013, this document became the only accepted means of evidence for the application for the VAT exemption in respect of supplies of goods to another EU member state. Companies registered for VAT in Germany whose customers transport goods across the border to other EU countries themselves must have this document for the exemption of the supply from VAT.

An essential part of the document is the signature of an authorised person connected to the customer, the date and the exact place of delivery. The document may be issued as a summary document for a period of up to one calendar quarter, and it can be sent electronically. If the transport is provided by the seller or by the customer through a contract carrier, this document is only one of the ways to prove the VAT exemption.

Martin Diviš +420 251 152 574

Introducing a new, modern information serviceWe’d like to tell you about the launch of our new service, PwC Online. With this service, we will regularly bring you news from the fields of taxation, law and business complemented by expert comments from our specialists.The aim of this service is to provide information to you in a timely manner and outline the potential impacts or opportunities for your business without overwhelming you with all the details. Whenever you feel the need to address any of the topics in more detail, please feel free to contact us. Current news and all you need to know regarding the PwC Online service can be found here (www.pwc.com/cz/cs/online).

This application will give you access to the latest informationIt not only allows you to be among the first to obtain current information, but also to be in contact with our experts in case you have other issues that you want to discuss.The application (now for Apple; the Android and BlackBerry version is being prepared) can be downloaded at the PwC Online service address mentioned above. The download and use of the application is free.

www.pwc.cz/tbnTax, Legal & Business NewsSummary

› News on the conditions for the exemption of supplies of goods from Germany to another EU member state

› News in the fields of taxation, law and business always at hand

› Statutory provisions on the immovable property acquisition tax

› The Senate has abolished the extraordinary depreciation of assets as well as the exemption of the share in the profit from personal income tax

› Operators of solar power plants are having problems concluding contracts on financing solar panel recycling

› Americans working in the Czech Republic will not have to pay health insurance in both countries

› Applicants for Czech citizenship will also be tested on history or geography

› Significant news in IFRS for next year will concern in particular the consolidation

› Study - Share offerings of medium-sized companies pave the way for the next IPOs and a healthier market

› We invite you

November 2013

News on the conditions for the exemption of supplies of goods from Germany to another EU member state

News in the fields of taxation, law and business always at hand

Tax, legal, accounting, advisory and assurance newsletter

If you are interested in receiving Tax, Legal & Business News, please contact Michal Horáček, michal.horacek@cz.pwc.com.

Topic of the month

2

Tax Law

The Senate approved the statutory provision on the immovable property acquisition tax on 9 October 2013. The new legislation relates to the recodification of the private law and in particular to the concept of immovable property in the new civil code and a new law on commercial corporations.

The tax rate remains at 4%. Unlike the original government proposal, the existing legislation regarding the taxpayer remains in place. In the case of acquisition of immovable property by exchange or purchase, the transferor is still the taxpayer, but the acquirer becomes the guarantor. In the past, the contracting parties in the above case were given the opportunity to choose the acquirer of the immovable property as the taxpayer. The acquirer is the taxpayer in all other cases of real estate transfers.

The statutory provision brings considerable changes in the area of tax exemption. Many of the exemptions were abolished or replaced by new ones. The following are the main changes in this area:

• The exemption for an immovable property investment in the share capital of a company has been abolished,

• An exemption shall apply for the

acquisition of immovable property by its occupant after the end of financial leasing. The first transfer of the immovable property to the leasing company remains subject to tax.

The statutory provision further reduces the number of cases in which an expert opinion about the price of the immovable property must be submitted. In certain cases, the tax base can newly be determined as a comparison between the price agreed in the contract and the comparative tax value. The comparative tax value is derived from the so-called guideline value, where a guideline value is recognised by the tax administrator and is based on the prices of commonly transferred immovable property (taking into account their location, purpose, age, etc.).

Overall, the new legislation on the immovable property acquisition tax should help to lower the administrative demands on the sides of both the tax administrator and the taxpayer. The taxpayer is newly given the possibility to deliver the required documents in the form of simple copies (without notarial authentication) or in electronic form.

The statutory provisions must further be approved at the first meeting of the new Chamber of Deputies, which will apparently be on 26 November 2013.

The Senate has abolished the extraordinary depreciation of assets as well as the exemption of the share in the profit from personal income tax The Senate approved a statutory provision on changes in the tax laws. The new statutory provision abolishes the exemption of the share in the profit from personal income tax. This exemption should have become valid in 2014. The possibility to apply extraordinary depreciation of assets will be abolished as well. On the other hand, the current provisions on taxation relating to investment and mutual funds remain unchanged. These are some of the changes that are part of the new statutory provision compared to the rejected amendment of the tax laws No. 1004. The Senate approved the statutory provision on 10 October 2013, and it was signed by the president on Thursday 18 October 2013. In order to become valid, it still has to be approved by the Chamber of Deputies, whose constitutive meeting is scheduled on 26 November 2013.

David Musil

+420 251 152 722

Operators of solar power plants are having problems concluding contracts on financing solar panel recycling The contracts on financing solar panel recycling should have been concluded at the end of June this year. These contracts were introduced by an amendment to the Act on Waste for the owners of solar power plants put into operation by 1 January 2013. According to the amendment, operators of power plants should have entered into a contract with operators of collection systems designated by the Ministry of the Environment.

Meeting the deadline was greatly complicated due to the low number of operators of collection systems. To date there are only 14 of them. For this reason, the Ministry of the Environment has asked the Czech Environmental Inspection not to inspect the conclusion of the contracts for now. The operators of collection systems are trying to satisfy the operators of solar power plants and allow them a quick online registration.

The legal framework currently does not cover all aspects of solar panel financing, such as the possibility to

change the collection system. Since recycling solar panels is a long-term process which can take decades, the operator of a solar power plant should be able to change the collection system in the event of dissatisfaction. At the same time, he should have control over the fact that the solar panels will be disposed of properly and that the contributions will be used for the purposes for which they were intended.

The amendment to the Act on Waste does not apply to operators of new solar plants exclusively using solar panels placed on the market in 2013.

If you still have not concluded a contract regulating the conditions for the financing of solar panels, do not despair and feel free to contact us. We will help you find a suitable partner and negotiate terms and conditions that are „tailored to your needs“ and fulfil your legal obligations. You will thus avoid paying penalties which will be enforced by the competent authorities provided the contract is not concluded in the near future.

Barbora Masařová

+420 251 152 912

Statutory provisions on the immovable property acquisition tax

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3

Employees Accounting

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Americans working in the Czech Republic will not have to pay health insurance in both countries Americans seconded as workers to the Czech Republic will not have to pay the statutory health insurance in both countries, as has sometimes been the case. The same will apply to workers seconded from the Czech Republic to the USA.

The appendix to the Treaty on Social Security between the Czech Republic and the United States, which governs the area of health insurance, should enter into force next year.

Currently, the Treaty only covers social security and pension benefits in particular, and sets out the rules for determining the jurisdiction of the legislation. The obligation to pay the statutory health insurance is not coordinated in any way and is only governed by the local legislation of both countries. This leads to situations where a person working in the other country (employee or self-employed) must pay for health insurance in both countries or ends up not paying health insurance in either of them.

Tomáš Hunal

+420 251 152 516

Applicants for Czech citizenship will also be tested on history or geography The new Act on the Citizenship of the Czech Republic which brings these requirements will come into force at the beginning of next year.

Applicants for Czech citizenship will now have to demonstrate a deeper knowledge of the cultural environment of the Czech Republic. He or she will have to pass a test demonstrating awareness of aspects of the Czech society such as the constitutional and legal system, in addition to the language test. The Ministry of Education has not yet laid down clear rules on what the test itself will look like.

The Czech Republic will thus join the other EU countries where such practice is common.

Jana Zelová +420 251 152 567

Significant news in IFRS for next year will concern in particular the consolidation Although the International Accounting Standards Board (IASB) did not prepare any big changes for 2014, companies preparing IFRS financial statements in the EU must prepare for important news.

Consolidating accounting units will primarily have to familiarise themselves with the new standards IFRS 10 - Consolidated financial statements, IFRS 11 - Joint arrangements and IFRS 12 - Disclosure of interests in other entities. The IFRS 11 standard brings fairly significant changes: it eliminates the possibility of the proportional consolidation of joint ventures and establishes a new model for accounting for joint activities which are common arrangements that do not take the form of a joint venture.

In connection with the implementation of these new standards, significant modifications were also made to IAS 27 (2011) - Individual financial statements (which is the new name of the former standard Consolidated and individual financial statements) and IAS 28 (2011) - Investments in associated and joint ventures.

The truth is that the changes mainly concern consolidated financial statements, so companies that make do with individual financial

statements will face significantly less changes.

Milan Zelený +420 251 152 088

4

We invite you

Practical seminars: • VAT – what to expect in 2014 Prague: 13th, 16th December 2013 and 17 and 20 January 2014 Brno: 12th December 2013 Held in Czech

• 24 January 2014 in Prague, Seminar: Employee benefits

Held in Czech Registration: zuzana.slaichova@cz.pwc.com

Details on these and other events can be found at www.pwc.cz/events

Contact

Jiří Moser Country Managing Partner PwC ČR +420 251 152 048

Peter Chrenko Lead Tax & Legal Services Partner +420 251 152 600

Věra Výtvarová Lead Assurance Services Partner +420 251 152 099

Miroslav Bratrych PwC Advisory Partner +420 251 152 084

Daniel Čekal Lead Advocate PwC Legal +420 251 152 900

Prague Office Hvězdova 2c, 140 00 Prague 4+420 251 151 111

Brno Officenáměstí Svobody 20, 602 00 Brno+420 542 520 111

Ostrava OfficeZámecká 20, 702 00 Ostrava+420 595 137 111

© 2013 PricewaterhouseCoopers Česká republika, s.r.o. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers Česká republika, s.r.o., which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

Study

Share offerings of medium-sized companies pave the way for the next IPOs and a healthier marketEuropean IPO markets can boast an almost tenfold increase in the value of primary offerings (IPO) in the third quarter of this year than for the same period last year. There were a total of 52 IPOs, which earned EUR 3 billion. This has been reported by a PwC IPO Watch study, which observes the primary offerings on European stock exchanges each calendar quarter. The return of medium-sized companies on the market foretells a much more stable supply of new primary offerings throughout Europe.

PwC is observing a number of companies that postponed their IPO due to adverse market conditions during the last three years. A healthy supply of primary offerings is now the result of favourable price expectations and the good performance of the shares which recently entered the stock market. Only one-fifth of the transactions with a planned income of over EUR 25 million have been postponed or withdrawn. This number is the lowest since 2007.

Private equity participated significantly in the new offerings. Four of such IPOs earned EUR one billion. IPOs backed by private capital have increased by more than half since the beginning of the year, and PwC expects them to significantly contribute to the activity on the IPO market in the near future.

London dominated the European markets in this year‘s third quarter with EUR 2.1 billion, which represents approximately two-thirds of the total volume of offerings over this period.

The next year will also be interesting as we can expect more than ten companies backed by private capital that are planning to enter the stock market in the coming months. There are many such companies that are waiting for their opportunity in the UK.

Marek Richter +420 542 520 170

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