News

CMS and Ernst & Young hold a seminar on a newly proposed solar tax in the Czech Republic.

On the 9th of December the CMS Energy team in Prague together with the CMS International Dispute Resolution team based in London and Ernst & Young organised a seminar on a new solar tax in the Czech Republic.

The new tax, which will affect  photovoltaic investments in the country, is likely to come into effect before the end of the year. Over 40 interested investors attended the CMS Prague office to find out what local and international legal remedies can be used to protect their investment.

Guy Pendell, a CMS Partner from London and the Head of the CMS Dispute & Resolution Practice across Europe commented:

“There has been no existent consultation process with investors, which is very worrying. If you are a foreign investor, we believe you should be considering remedies available under international law, the Energy Charter Treaty or bilateral investment treaties to protect your investment. Every investor’s case is different, so it’s hard to generalise at this point, but one should seriously consider three questions: is the proposed tax a tax or a levy? Is the tax legitimate? and is it in public interest? Law firms with a broad international arbitration expertise can help you work through your options.”

Ben Holland, CMS Partner from London specializing in energy disputes, added:

‘Anyone considering a claim, whether under international arbitration or in the local courts, needs to think now about when, where and how to bring any claim. My advice would be:  carefully measure your options and decide where the best long term solution. Anyone trying to bring possible joint actions also needs to talk now to see if other investors have similar issues.’

Libor Fryzek, Head of Tax Services at Ernst & Young commented:

‘The so called solar tax is technically not a tax, but levy that is imposed by a non-tax legislation. Although it is governed by the Tax Administration Act, some of its features may create practical implementation issues.’

For further information, please contact:

Melania Kozyra
CEE Corporate BD Manager
CMS
e: melania.kozyra@cms-cmck.com
t: +48 22 520 8476
m: +48 607 357 009
f: +48 22 520 5556