In order to defend the tax deductibility of services, it is necessary to have robust documentation, especially in cases where a provider of services is a parent entity. At the same time, when the management services were provided by an executive in the parent entity, who is also an executive of the local entity, this involvement can be perceived as a performance of the function of a statutory body, and not as a service provided by the parent entity. Appropriately prepared documentation means documentation and records of outputs proving an actual provision of the management services, as well as documentation of a benefit for the taxpayer, together with an adequately set transfer pricing methodology. The Regional Court in Brno confirmed this procedure in a recent case law.***
Natalia Pryhoda
PwC | Tax and Legal Services