Opinion of the Ministry of Finance
1. If a legal entity (parent company domiciled outside the Czech Republic) provides financial resources to another legal entity (subsidiaries domiciled in the Czech Republic), this is a provision of money which is not in itself subject to tax. ( The subsidiary will receive the funds even if it does not make any performance.)
2. If a legal person provides financial resources to another legal entity for the purpose of adjusting the income tax base, because the prices at which the legal person provides performance for related parties differ from the prices agreed between independent persons in normal business relations, it is not the provision of funds which, in the sense of VAT, are not subject to tax, but by a part of the remuneration for the provided services of “shared services” for individual customers (connected persons). ( If she did nothing, she would not receive compensation from the parent company.)
According to § 36 ZDPH, the tax base is everything that the payer receives or is to receive as payment from the person for whom he performed the performance or from a third party , and therefore funds provided by a third party (parent company) that offset the price of services provided to related parties, enter into the tax base of these transactions.
(We understand that this is the latest guidance on TP adjustments in Czech Republic).
Source Ucetni-portal.cz
