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Landmark decision of Czech Supreme Administrative Court Treatment of interest reclassified under thin capitalization rules; Treaties with the Netherlands and US

|Approved Changes| Czech Republic
 Czech Republic
Treatment of interest reclassified under thin capitalization rules; Treaties with the Netherlands and US

The Czech Supreme Administrative Court gave its decision in Case No. 2Afs 108/2004106 on 10 February 2005 in one of its first decisions in the area of international taxation.

(a) Facts. The taxpayer, a company resident in the Czech Republic, received a loan from related party creditors seated in the United States and the Netherlands. The payment of interest on these loans …

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