This document provides a summary of recent legal news and judicial decisions from the Czech Republic in October and November 2018. It discusses amendments to property transfer tax law to exempt housing units in family homes, opportunities for individuals to object to their personal data published in private registers, and several judicial decisions around issues like the interpretation of double taxation conventions, disproportionate contract fulfillment, monetary damages for interference with corporate rights, refusal of personal data requests as administrative decisions, and additional tax returns taking priority over taxation controls. The newsletter informs clients that the law firm will provide updates on future legal changes and decisions.

1. NOVEMBER 2018 LEGAL NEWS
Dear clients, let us to introduce you some news from Czech legislation and judicial decisions, which
arose during October and November 2018. We will inform you about next changes soon.
+ Property Transfer Tax Amendment
The amendment proposes to exempt the
housing units in family-houses same as other
apartments. The argument of this change is the
fact that also these buildings serves to living.
+ Opportunity of defence against the mean of personal data processing
In case you do not agree with your personal
data publication in some of the private
registers, the Advisory Centre of the Czech
Office for Personal Data Protection (ÚOOÚ)
advice: Contact the operator of such a private
register and use your right to object first. If the
operator does not satisfy your objection in
reasonable term (30 day usually) or does not
even react, contact ÚOOÚ. In an appropriate
form give evidence of your objection and
operator's answer or evidence about
operator's not answering. In case of reasonable
doubts about identity of the person using the
right to object the operator has right to ask you
to give additional evidence. On the other hand,
the operator cannot condition the execution of
request by signing a request with officially
authenticated signature or enclosing your ID. If
he did so, he burdened the subject of personal
data unreasonably. The objection do not have
to include officially authenticated signature nor
ID copy.
From judicial decisions:
+ The Double Taxation Conventions interpretation
In a judgement from 27th
September 2018 (File
No. 2 Afs 40/2018) The Supreme
Administrative Court decided the case
regarding credit loan transaction between the
parties of the case. The claimant paid in
taxation term 2006-2009 BATIF interests from
which he made a tax deduction (15 % rate) as
BATIF payer in this credit loan and mentioned
tax deduction was transferred to tax
administrator's account. Later the claimant
filed a tax overpaid refunding petition for the
term of 2006-2009. The claimant set up a claim
according to The Double Taxation Convention's
between the UK and Czechoslovakia
(Convention) definition of interest in article 11.
The claimant deduced that taxation right
belongs only to the UK and that is why an
income from BATIF interests from credit loan
cannot be taxed according to Income Tax Act
because that would break the Convention and
therefore also the Czech Republic international
obligations. According to the Court the tax
administrator cannot automatically use Czech
law to interpret a Double Taxation Convention
if there is a possibility to applicate the
Convention. The interpretation has to be made
primarily on the basis of such an international
agreement with using principles of
international law and commentaries to the
OECD Model Tax Convention on Income and on
Capital.

2. + Contradiction to good manners for rough disproportion of fulfilment
in Purchase Contract
According to the judgement of The Supreme
Court from 27th
June 2018 (File No. 29 Cdo
3467/2016) the fact that a contractual part is
not satisfied with full equivalent of fulfilment
according to the agreement about extent and
object is not in contradiction to the good
manners. Purchase Contract participants can
negotiate also a price notwithstanding the
market price. On the contrary, the rough
disproportion of fulfilment might indicate
contradiction with the good manners
according to what one participant filled and
what the second provided in relation to other
circumstances (not as itself).
+ An appropriate monetary satisfaction for an interference into corporate
firm rights
The Supreme Court formulated his conclusions
about this issue in recent judgement from 9th
July 2018 (File No. 23 Cdo 1175/2018). As for
the right to an appropriate satisfaction for
unfair competition, there are no special
conditions the stipulated by law for an
appropriate monetary satisfaction for unfair-
competition conduct of a violator. The main
point of the case was to prove that the
competitor suffered due to the unfair
competition a non-proprietary loss for which
there is no possibility of a settlement through
non-pecuniary satisfaction. A law neither the
judgement did not formulate any condition for
admission of an appropriate satisfaction which
would be based on the way the competitor is
touched by the unfair competition participates
on a trade. In case the both of the lower courts
followed the fact that the compliant is the
competitor and did granted the compliant an
appropriate satisfaction only referring to her
indirect participation at the market (through
licence of another corporation), their legal
conclusions were incorrect.
+ Refusal of subject of personal data's request as an administrative decision
The Supreme Administrative Court considered
an admissibility of an action to defence against
an unlawful interference of an administrative
body in case of the subject of personal data is
not satisfied with using his right according to
the personal data protection legislation. In this
case it was the Czech Police which unlawful
interfered when refused a request to erase the
personal data from the Evidence of
unwelcomed persons and Schengen
Informational System (SIS II). The fundamental
fact for this decision was the character of Czech
Police statement about refusing the request to
erase the personal data. The Court stated that
the Czech Police statement is not only a
declaratory memorandum but an act which is
capable to interfere against the right of
complainant. The statement about refusing the
request to erasure the personal data is in its
consequences a refusing administrative
decision. The complainant used the action to
defence against an unlawful interference of an
administrative body. This action is admissible
only in case there is no other way to defend
someone's right. But in this case the
complainant should have defended his right by
using the action against an unlawful
interference of an administrative body first.
+ An additional tax return takes priority over taxation control beginning
The Supreme Administrative Court concluded
(in case File No. 7 Afs 229/2018) that if the Tax
Office reasonably supposes an additional
assessment of tax, the taxpayer has to have an

3. opportunity to correct his errors given by the
Tax Office through an Additional Tax Return
Appeal. This is typical for cases where it is
possible to apply a conclusion of one tax
control to more tax periods. It means that The
Supreme Administrative Court confirmed that
the tax administrator cannot directly initiate
the tax control, if it means a bigger time and
administrative demands in addition with 20%
penalty, immediately.
Do not hesitate to contact us with any concrete question.
We will inform you about next legal news.