In June 2024, the National Accounting Council (“NAC”) approved a new Interpretation I-50 related to deferred taxes.

The interpretation responds to the possibility given in the Income Tax Act starting in 2024 to choose a tax regime in which the taxpayer excludes selected exchange rate differences (for receivables and debts) from the income tax base. Until the end of 2023, all exchange differences were part of both the profit or loss (accounting view) and the tax base (tax view). Therefore, the taxpayer is now given the option not to include the selected exchange rate differences in the tax base. This change will result in temporary differences between the accounting and the tax value of receivables/payables, which gives ground for the recognition of deferred tax.

The text of Interpretation I-50 itself is available on the NAC website – www.nur.cz