Tax Treaty Case Law around the Globe 2013

1. S. 97 Introduction

Case No. 2 Afs 29/2012-18 belongs to the category of Czech case law - which does not comprise many cases - dealing with international taxation. The reason for such a categorization of this case is that in addition to the procedural issues which the judgment addresses, it also deals with the issue of the interpretation of Article 5(1) and Article 5(3) of the “old” tax treaty between the Czech Republic and the Slovak Republic .

2. Facts of the Case

In 2002, the taxpayer, an individual resident in the Slovak Republic, was providing welding services at the premises of a Czech joint-stock company Podhořan Lukov, a.s. based on a contract for work concluded with the company. The taxpayer was providing welding services for the completion of unfinished parts for shipping containers (completion of platforms and rails). These services were provided for a period shorter than six months.

The taxpayer did not submit a tax return for the period covering 2002 and failed to submit one even after requested to do so by the tax administrator. From this, the tax administrator assumed, according to Article 44(1) of the Act on Tax Administration, that the tax liability of the taxpayer was z...