The judgment of the Czech Supreme Administrative Court (the “SAC”) dated 15 May 2026, Case No. 8 Afs 164/2025-40, concerns an additional corporate income tax assessment imposed on CK Hungariatour for the years 2018–2020, specifically in relation to evidence of management services provided within a holding structure.

The SAC examined whether the company had sufficiently demonstrated that management services had actually been provided by its parent company in order for the related costs to qualify as tax-deductible expenses. At the same time, it considered whether the tax authority had sufficiently specified and substantiated its doubts regarding the actual provision of those services.

The Company’s Arguments

To substantiate the provision of management services, the company essentially submitted only formal accounting documents, namely invoices, contractual documentation and related accounting records issued by the parent company. The company further argued that, in its view, the tax authority had failed to discharge its burden of proof. It claimed that by submitting the accounting documents, it had fulfilled its obligation, while the tax authority had merely expressed general doubts without supporting them with specific evidence.

The company also argued that, in the case of services provided within a group of companies, it is natural that their provision is not documented in the same manner as in a relationship with an independent external supplier. On this basis, it maintained that the tax authority should not have questioned whether the services had actually been provided without further grounds for doubt.

Conclusions of the SAC

The SAC agreed with the tax authority, albeit with certain reservations. Although the initial request to substantiate the relevant facts was not ideally formulated and did not itself contain specific doubts, the tax authority subsequently explained those doubts sufficiently in the findings of the tax audit and in the tax audit report.

The judgment also states that invoices or other formally correct accounting documents alone do not prove that services were actually provided if the tax authority raises specific and reasonable doubts. The company also failed to substantiate even the minimum costs associated with accounting and payroll services. Such costs cannot be recognised merely because they appear necessary for the company’s operations.

Practical Implications

The judgment is of practical significance primarily for business groups, such as holding or corporate group structures, in which support and management activities are provided centrally for multiple companies, for example in finance, including accounting and payroll services, as well as IT, HR or strategic management.

If the tax authority specifically challenges the actual provision or scope of services, the taxpayer must respond with substantive evidence. It is not sufficient to argue that the services represent standard cooperation within a holding structure.

Services provided between a parent company and its subsidiary must be substantiated in the same way as any other tax-deductible expenses. Conversely, the SAC stated that where services worth millions are provided between companies belonging to the same holding structure, it can reasonably be expected that they will have sufficient documentation demonstrating what services were provided to each other and to what extent, rather than two independent entities.

The decision also cautions against relying on the argument that certain shared costs, such as accounting or payroll expenses, are necessary. Even these costs cannot automatically be recognised simply because they appear essential to the company’s operations. It is necessary to demonstrate that the service was actually provided and to establish its minimum value, with the relevant costs allocated to the specific company.