In 2013, DFH Haus CZ s.r.o. filed amended tax returns for 2006, 2010, and 2011, following the German tax authority’s adjustment of its transfer prices in 2006, in order to claim the resulting tax loss for 2006 and apply it against its tax liability in the Czech Republic for 2010 and 2011.
The tax authorities disallowed these amendments.
A complaint filed by DFH with the regional court was dismissed and an appeal was then filed with the Supreme Administrative Court.
Judgement of the Court
The Supreme Administrative Court rejected DFH’s appeal and upheld the decision of the tax authorities.
“ On the basis of the foregoing, the Supreme Court of Justice, like the Regional Court, considers that the complainant’s tax loss for 2006, as a relevant fact in terms of the reopening of proceedings, was incurred, assessed and could be deducted from the tax base pursuant to Section 34(1) of the ITA only on 8 July 2013, when it was decided upon or determined by the aforementioned additional payment assessment for 2006. Therefore, the Supreme Administrative Court fully agrees with the Regional Court’s conclusion that it was only on that date that the corporate income tax loss for the tax year 2006, which the applicant claims to apply for the tax years 2010 and 2011 pursuant to Article 34(1) of the ITA, was determined (increased). The assessment of the tax loss for the year 2006 in 2013 cannot, therefore, be regarded as a new fact from the point of view of the reopening of the proceedings, which came to light after the assessment proceedings for the tax years 2010 and 2011 had been concluded and which already existed at the time of the tax administrator’s decision in those original assessment proceedings. Therefore, the condition for the authorisation of the reopening of proceedings under Section 117(1)(a) of the Tax Code, consisting in the existence of a new fact already existing at the time of the decision, which has newly come to light and was not known to the taxpayer or the tax administrator at the time of the decision, despite its existence, was not met in the case under consideration. Therefore, the complainant cannot claim, by way of a retrial, a reduction of the corporate income tax base for 2010 and 2011 by the tax loss assessed for 2006 in 2013.
 The fact mentioned by the complainant that the tax loss for 2006 stems from the adjustment of transfer prices in the context of the tax audit for the years 2005-2007 does not change the above conclusion that the condition for the reopening of proceedings has not been met, since in the present case the decisive factor in terms of the reopening of proceedings for the tax years 2010 and 2011, which were closed by final payment assessments (assessment of the novelty of the facts), is when the tax loss for 2006 was assessed, not when the fact giving rise to the tax loss occurred. In the present case, it was the tax loss that could be deducted from the tax base in certain circumstances, not the overvalued transfer prices in 2006, that was the fact that could affect the amount of the complainant’s tax liability.
 Given that the complainant became aware of the transfer price adjustment giving rise to the tax loss on 19 July 2013, it can be accepted that, without fault on the part of the complainant or the tax authorities, the tax loss for 2006 could not have been claimed earlier. However, the complainant’s knowledge of the transfer price adjustment does not alter the fact that the assessment of the tax loss for 2006 in 2013 cannot be regarded as a new fact for the purposes of the reopening of the proceedings, which came to light after the end of the assessment proceedings for the tax years 2010 and 2011.
 As regards the complainant’s reference to the judgment of the Municipal Court in Prague of 19 August 2020, no. 10 A 30/2020 63, and the proceedings on the complainant’s cassation complaint against that judgment (terminated against the complainant by the judgment of the Supreme Administrative Court of 11 November 2022, no. 4 Afs 287/2020 49), the Supreme Administrative Court states that the case in question does not affect the assessment of the present case, which, in brief, concerns whether the assessment of the tax loss for 2006 on 8 July 2013 constitutes a new fact in terms of fulfilling the conditions for the renewal of the corporate income tax assessment proceedings for 2010 and 2011.
 The arguments raised by the complainant in relation to the fact that it did not take the opportunity to challenge the tax authorities’ decisions of 13 September 2013, nos. 819339/13 and 819349/13, by which the tax authorities discontinued proceedings in respect of the supplementary tax returns for 2010 and 2011 submitted on 27 June 2013, in which the complainant claimed the tax loss for 2006 in instalments, are not relevant to the fulfilment of the conditions for the authorisation of the reopening of proceedings. The Supreme Administrative Court therefore did not consider it further. If the complainant argued that he had fulfilled the condition expressed in Section 117(2) of the Tax Code, i.e. that it was not possible to file additional tax returns for the years 2010 and 2011 due to the reasons for the reopening of the proceedings, this also does not change the above conclusion that in the case under consideration the condition for the authorisation of the reopening of the proceedings pursuant to Section 117(2) of the Tax Code was not fulfilled. (1)(a) of the Tax Code, consisting in the existence of a fact already existing at the time of the decision, which had newly come to light and which, despite its existence, was not known to the taxpayer or the tax administrator at the time of the decision. The complainant’s reference to the judgment of the Regional Court in Brno No 29 Af 71/2018 79 is not relevant to the case under review, since in that judgment the Regional Court did not deal with the fulfilment of the conditions for the renewal of proceedings.”
“ The Supreme Administrative Court finds that all the objections raised by the complainant are unfounded and the appeal is therefore unfounded. Accordingly, the Supreme Administrative Court dismissed the appeal pursuant to the second sentence of Article 110(1) of the Code of Civil Procedure.”0098_4Afs_2200040_20221116124110