In recent years, the number of tax audits focused on transfer pricing and the amounts of the resulting tax adjustments have skyrocketed in the Czech Republic. This largely has been caused by the Czech Tax Administration’s systematic risk assessments, which are subsequently used to select taxpayers for transfer pricing audits. With country-by-country reporting on the way and transfer pricing in the spotlight, the figures are expected to escalate further. As the risk assessment tools and approaches used by the Czech Tax Administration have become more sophisticated, the importance of mitigation of potential transfer pricing risks and preparation of transfer pricing documentation becomes priority for the taxpayers.

Natalia Pryhoda
Tax and Legal Services

TP Insights