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Further use of tax losses of previous years

In April of this year, we provided a briefing on the main guidelines for tax reform planned for 2018, the link to the article is available here.

One of the most important planned changes concern the reform of corporate income tax (CIT), which stipulates that the CIT at 20% rate will be paid at the time of it allocation rather than taking into account a profit made as it is now including dividends, non-operational expenses, representational costs exceeding the amount specified etc.

The new draft law of CIT currently is in the process of negotiations and social partners and business associations are assessing and commenting it. If the decision to carry out the reform will not change,now there are no indications of potential change, all the planned changes in tax laws, including the new law on CIT will come into force on 1 January 2018.

We would like to draw attention of the taxpayer to the fact that as the result of the CIT reform, further opportunity to use the accumulated losses of the previous year (until 1 January 2018) will be lost as the new CIT law does not provide any transitional period. Consequently, the accumulated tax losses will be irretrievably lost.

Certain ministries and taxpayers have expressed and continue to make proposals to introduce a transitional period, however, the position of the Ministry of Finance on this issue remains unchanged.

There is still time until the start of the new CIT ‘’era’’ and we encourage taxpayers to analyse their individual situation and seek solutions in case the accrued losses are significant.


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