News

Legal news April 2015

Delays in the Preparation and Implementation of Projects under EIA. Amendment to the Act on Significant Market Power Approved by the Government. The report on relations and transfer pricing documentation to be addressed simultaneously.

Delays in the Preparation and Implementation of Projects under EIA

The preparation and implementation of all major construction projects is likely to be delayed as a result of an amendment to the Act on Environmental Impact Assessment (the “EIA Act”), taking effect on 1 January 2015. The principal objective of the amendment relates to the transposition of EIA Directive 2011/92/EU, which is the European Commission’s prerequisite (along with the Civil Service Act) for the further use of EU funding.

The amendment predominantly ensures more-intensive involvement as well as public awareness in the EIA processes and subsequent proceedings as required by the European Commission, including the possibility of judicial reviews of individual deliverables. As such, the changes also relate to the definition of projects and processes subject to EIA. Unfortunately, the amendment will affect approval processes that are already in progress, in which the relevant authorities review whether previously issued EIA statements comply with the requirements of the EIA Directive.

Zdeněk Horáček +420 246 042 812 zhoracek@deloittece.com

Amendment to the Act on Significant Market Power Approved by the Government

On 9 March 2015, the government approved an amendment to the Act on Significant Market Power and the amendment will now be submitted to the Czech Parliament. The amendment provides an overall clarification of terminology, removes inaccuracies and unclear issues and sets certain stricter conditions. The fundamental principle will be an effort to penalise consistent behaviour of entities with significant market power that the act perceives as an abuse of significant market power (newly, the condition stating that this behaviour is intended to result or results in a significant violation of competition will be removed). In addition, a selection of banned practices will be outlined in greater detail. Newly, the banned practices will include the charging of listing fees.

The amendment, if adopted, will significantly simplify the sanctioning of retail chains. The sanctions for breaching individual obligations may amount up to CZK 10 million or 10% of net turnover of the sanctioned entity.

Aleš Kubáč +420 246 042 853 akubac@deloittece.com

The report on relations and transfer pricing documentation to be addressed simultaneously

Given that we are currently in the intensive period when reports on relations are being prepared, we would like to draw your attention to the connection between report on relations and transfer pricing documentation, which may not be immediately apparent. Reports on relations are intended to meet the requirements arising from the Business Corporations Act. Independently of the report on relations, the application of transfer pricing tax regulations needs to be assessed. Even though, at first sight, it may seem that these are two separate processes, the information disclosed in reports on relations should be aligned with the information presented in transfer pricing documentation.

If you have any questions or need assistance related to this topic, please contact our legal and tax department specialising in transfer pricing.

Lenka Losenická +420 246 042 867 llosenicka@deloittece.com