International Cooperation and Exchange of Information in Light of Current Practice and Statistics

When representing clients in tax audits, we see a large number of international requests, where tax authorities submit very specific inquiries abroad in order to verify information as accurately as possible. The tax administration has recently published interesting statistics, which we summarize for you in our regular Tax Flash.

In 2024, international cooperation between tax administrations continued, primarily through the exchange of information. The Czech Republic received 393 requests and sent 278. The automatic exchange of information yielded 1.53 million records from 104 countries, while 1.99 million records were sent to 91 countries. A new feature was the automatic exchange of data on sellers operating on digital platforms, which yielded more than 56,000 records from abroad and nearly 46,000 records from Czech platforms.

In the area of international assistance in the recovery of tax claims, there was a slight decrease in the amounts obtained from abroad, with CZK 30.9 million recovered (compared to CZK 53.5 million in 2023). On the other hand, the Czech financial administration sent CZK 103.4 million abroad, mainly thanks to one large claim amounting to CZK 69.4 million.

In the exchange of information, the financial administrations focused mainly on transfer prices and the accurate setting of transactions between related parties.

Furthermore, the one-stop shop (OSS) system was strengthened, with EUR 469 million collected from Czech entities, representing year-on-year growth of more than 36%, and other EU countries paying EUR 538.8 million to the Czech Republic, 30% more than in 2023. So much for the financial administration's statistics.

In conclusion, we would like to point out that, unfortunately, in practice we also encounter the purposefulness of international requests, where international requests are sent solely for the purpose of stopping the running of the limitation period in tax audits. In such cases, we can help you through legal means of protection so that this institution is not abused by the tax office. Last but not least, in order to strengthen the legal certainty of business groups, we cannot but recommend a binding transfer pricing assessment for both domestic and cross-border transactions, with which we will be happy to assist you.