International Taxation and Tax Structures

International Taxation and Tax Structures

Getting your company or group's tax setup right is essential for efficient operation. Your company achieves a stable turnover and during the period of its operation on the Czech market you show undistributed profits of previous years, the payment of which you postpone due to tax burden. As a result of increasing regulation, you have a poor or risky tax structure and need to change it.

You also have subsidiaries abroad and find it difficult to keep track of the financial flows between companies or what tax obligations apply to you. Whether you do business locally or internationally, what you need right now is to have a correct, efficient and secure corporate structure.

A properly set up tax structure is very important and can have a major impact on both your future business plans and your tax obligations. We have experience with dozens of foreign expansion projects, cross-border mergers, structuring family international holdings and other transactions. We have structured numerous options for both individual and corporate clients. Our experts in the Czech Republic and abroad are at your disposal even after the completion of the project. Our acquired knowledge of your company and experience will then enable us to make relevant suggestions for improvement during further services.

We will be happy to arrange for you: 

  • designing the optimal tax strategy for business in the Czech Republic and abroad
  • design and implementation of tax-efficient holding and financial structures
  • reviewing existing business strategies and structures and recommending adjustments to ensure you don't pay more tax than you have to
  • analysis of the impact of international tax initiatives (BEPS, ATAD) on the operation of your company or group
  • advice on international invoicing for goods or services, including advice on the application of withholding tax

Success stories

  • Security - Our client, a Czech-owned company engaged in the purchase of goods abroad and their exclusive distribution in the Czech Republic, was looking for a suitable solution to protect their acquired assets and family. In fact, over the course of successful years, the company had spontaneously grown to include other entities in the holding group. Some of the entities in the group owned properties which they leased to other companies in the group and vice versa. Property management was fragmented and expensive.We analysed the entire business profile and risk areas. We proposed the spin-off of selected properties from each entity in the group and their transfer to a newly established trust, including intermediate steps.The solution worked with alternatives of splits, deposits and sales.

    Within 6 months we established the trust fund and allocated the selected real estate assets to it. The real estate is taken care of under one roof with significant cost savings and the assurance that no one will be able to dispose of it arbitrarily. We have protected the client's assets in the amount of approx. The client was assured of peace of mind that his children would be protected.

  • Savings - The owner of a Czech manufacturing company operating production in three different industrial halls around the Czech Republic, each hall having a slightly different specialisation, was interested in selling part of the production. However, the current situation was unattractive to potential new owners - a direct sale of part of the shares would mean selling part of each production, and selling a specific industrial hall would mean selling a commercial plant, which was not accepted by the interested parties.After careful analysis, we proposed to reorganize the company and transform it into four separate entities - three production and one central company providing all administration.

    Each production operates as a separate entity, and it is easy for potential bidders to show the official financial results of a particular production area and to offer for sale the company in an easy share transfer, without at the same time selling part of the other production or administration.

    We saved the client 120 million crowns and prepared the company for sale at the same time.

Success stories

  • Expansion- For a Czech company whose production capacity was no longer sufficient to meet demand, we provided tax, legal and accounting solutions for setting up production abroad. The owner of the company decided to buy a company in France, the selected company was in insolvency and required the condition of maintaining existing jobs.We prepared the structure of the transaction and its financing, proposed the method of settlement of deposits between the individual investors, implemented accounting processes and procedures, prepared an accounting system for reporting data according to the requirements of the Czech parent company, we arranged the deployment of Czech management of the company, including setting up their shareholder agreements and social and health insurance issues.

    The result is a successful Czech-French joint venture and a client that is considering expansion into other European markets.

    We have saved the client's employees a lot of trouble with their stay abroad and ensured that the client can repatriate profits from abroad in a tax efficient manner.

  • Intergenerational cross-border exchange- We have been accompanying a family business from Germany with their business in the Czech Republic for more than 25 years.

    25 years is a long time and during that time we have experienced many significant events with our client, periods of major investments related to the use of investment incentive rebates, tax controls on both sides of the border, setting up uniform reporting, setting transfer pricing rules.

    The biggest project we have undertaken so far with the owner was the intergenerational exchange and the involvement of the German transparent entity GmbH and CoKG. Together with German tax advisors, we designed the ownership structure of the entire group, including an assessment of the tax and accounting implications. Together with the lawyers, we also set the rules for the handover of the management of the company.

    We successfully completed the project and the company is moving forward in both countries. We are currently working with the management on how best to deal with all the implications of COVID-19.

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