At the end of April 2022, the Regional Court in Prague issued judgment no. 51 Af 62/2020, which deals with the application of higher tax credit for investment incentives in the case of submitting additional tax return.

The Finance Ministry had previously agreed in the Coordination Committee between the Finance Ministry and the Chamber of Tax Consultants of the Czech Republic in 2007 to the possibility of applying higher tax credit (which, among other things, the plaintiff also used as an argument). However, over time, the tax administration has tried to interpret this view somewhat more strictly and has tried to exclude some options for applying higher credit within additional tax assessment.

However, the Regional Court in Prague agreed with the taxpayer, confirming the possibility of applying higher tax credit on grounds of an investment incentive, providing that it does not result in the assessment of higher tax liability.

The tax administration has submitted an appeal in cassation against the decision in question to the Supreme Administrative Court (2 Afs 118/2022), so – although we do not expect it to happen – a different final verdict cannot be ruled out.

If you have any questions about investment incentives and about applying tax credit, please do not hesitate to contact us – we have, among other things, successfully claimed higher tax credits in additional tax returns on several occasions.