Building Foundations Mandantenbrief

Building Foundations Mandantenbrief Information on Law, Taxes and Economics in Czech Republic Issue: October 2016 www.roedl.cz Content: Law > Are you authorized to represent? Taxes > Legislation > Taxes Briefly > Judicial decisions Economics > Operating lease is to be reported on a company s balance sheet > Are you authorized to represent? Václav Vlk, Lucie Kianková, Rödl & Partner Prague Introduction > One of the many issues brought forward by the recent recodification of the Czech private law is whether business corporations may be represented by an authorized officer and a procurator acting jointly. While the opinions of experts, whether legal scholars or practicing lawyers, still vary, the recent ruling of the High Court in Prague now (finally) appears to have found a balanced solution to this problem. This article aims to outline the background information and the basic points of the reasoning used by the High Court in Prague in its recent landmark decision. Statutory and Contractual Representation The first of January 2014, the effective date of the Czech private law recodification, witnessed a major change in the the general legal concept of juridical persons, which are no longer treated as entities that have the authority to act on their own behalf. Instead, in any conduct involving third parties, they must be represented by a duly authorized individual. Source: Rödl & Partner Archive Under law, juridical persons are represented by their authorized officers, who act on behalf of the company in their official capacity. In accordance with section 163 of the Civil Code, authorized officers have all powers that are not vested in the capacity of another corporate body either by an applicable constitutional documents, by law or by a decision of a public authority. The Civil Code also allows employees to represent their corporations to the extent commensurate to their job description or position. 1

Law In addition to statutory representation, juridical persons may also appoint their representatives by means of a contractual arrangement, such as by a general commercial power of representation or by a power of attorney. Authorized Officer or Procurator? By definition, authorized officers, whether acting as members of a board or as stand-alone officers, act as the company s principal governing, managing and executive body. Procurators, on the other hand, are individuals who are authorized by the juridical person to carry out all legal acts pursued in the ordinary course of its business. At first glance, authorized officers and procurators appear to have very similar scope of powers. But the similarities should not mislead us to the conclusion that these two types of representatives are interchangeable. Form of Representation and Internal Restrictions Form of representation refers to the extent of acts in which a specific individual may represent the appropriate juridical person. Concerning authorized officers, the form of representation depends on the number of officers and on the wording of the constitutional document that regulates their powers and their capacity to act. In its section 164(2), the Civil Code allows corporations to be represented by each authorized officer (board member) acting individually, by several authorized officers acting jointly (whether in all or in some matters only) or even by all officers acting jointly in all matters. The failure to comply with the prescribed form of representation either makes the relevant act null from the onset (non-existent), and depending on circumstances, may even bind the authorized officer in person as an individual, instead. The form of representation by a procurator, who has the general commercial power of representation, is comparable as far as the basic formal elements are concerned. Where the corporation appoints a single procurator, he or she represents the corporation on his or her own. When several procurators are appointed, the company has the discretion to decide whether each procurator is to represent the company severally or whether the procurators are to act jointly. The failure to proceed in accordance with the approved rules have the same consequences as in the case of authorized officers. The form of representation, either by an authorized officer or by a procurator, must be recorded in the commercial register. Internal restrictions of authorized officers or procurators are restrictions in their power to represent the corporation that are effective within the corporation s own hierar- Source: Rödl & Partner Archive chical structure. This means, for example, that some legal acts may require a prior consent of other officers or other corporate bodies prior to proceeding with regard to third parties. At the same time, internal restrictions do not limit the validity and effect of the authorizer officer s or procurator s acts vis-à-vis third parties. As a consequence, internal restrictions of authorized officers and procurators are not recorded in the commercial register. Procurator and Authorized Officer Acting Together In browsing records in the commercial register, we frequently encounter situations when a juridical person is represented by two authorized officers acting jointly or one authorized officer acting jointly with a procurator. However, this form of representation is inadmissible, as established by the recent judgment of the High Court in Prague, adopted on 4 August 2015 in the case No. 14 Cmo 184/2014 (the ruling). In the ruling, the High Court finds that the company s procurator may not be put on equal footing with the company s managing director. The law draws a clear and unambiguous difference between authorized officers and persons having a general commercial power of representation. While authorized officers may represent their company in all legal acts, procurators only have the capacity to represent the company in the ordinary course of its business. The High Court supports its argument also by reference to section 163 of the Czech Civil Code. This section is inapplicable to procurators, because procurators are not an official body of any juridical person. In closing, the High Court holds that a company may not be represented by authorized officers and procurators acting jointly. An argument to the contrary would lead to the nonsensical conclusion that the power to represent the company jointly with an authorized officer could be vested in any other persons who represent the company either by operation of law or in accordance with some other contractual authorization. At most, a company may introduce an internal restriction that would require an authorized 2

Law / Taxes Issue: October 2016 officer to act jointly with a procurator. But, as mentioned previously, internal restrictions are not to be recorded in the commercial register. In addition, internal restrictions certainly do not amount to or coincide with the form of representation. Recommendation According to the established judicial practice, authorized officer s power to act may not be dependent on procurator s legal acts; in fact, registration courts are expected to decline recording this form of representation in the commercial register. In our experience, though, this state of affairs still continues today. Our recommendation for business corporations (and their managing directors) is to have their constitutional documents amended and their records in the commercial register modified at the earliest convenience so as to comply with the prevailing law and judicial practice regarding the corporation s form of representation. Contact details for further information: Mgr. Václav Vlk Attorney-at-law / Associate Partner Phone: +420 236 163 760 E-mail: vaclav.vlk@roedl.cz > Legislation Alexander Novák, Martina Šotníková Rödl & Partner Prague Amendment Bill to the Income Taxes Act 2017 Compared to previous years, the Ministry of Finance has prepared a fairly extensive amendment to the Income Taxes Act for 2017. The Parliament has started debating the amendment first in September. Due to the extensive changes, we will acquaint you with the anticipated changes gradually. This time, we will focus on the changes relating to a tax bonus and the area of property. Stricter Conditions for Awarding the Tax Bonus A tax bonus is currently paid to those taxpayers whose total amount of tax benefits for children exceeds the total annual tax liability. The tax bonus amounts to the difference, i.e. the total amount of tax benefits for children less the annual tax liability. However, the tax bonus may only be claimed if the taxpayer achieves the total income from his employment (Section 6), business (Section 7), capital (Section 8), and lease (Section 9) in the amount of a sextuple of the minimum wage (CZK 59,400 in 2016) in the given year. Starting from 2017, the amendment bill proposes stricter conditions for awarding the tax bonus. The threshold for awarding the tax bonus will not include the income from capital and the income from lease. As a result, the taxpayer will have to achieve the sextuple of the minimum wage only by earning the income from his employment and business. Option to Depreciate Technical Improvement by Its User What may be considered revolutionary is that technical improvement may newly be depreciated by its user. It is an amendment in favour of taxpayers for which the professional community led by the Chamber of Tax Advisors has been striving for a long time. Nowadays, the technical improvement of a leased thing may only be depreciated by a lessee (not a sublessee) or a user if the property is or has been purchased in the form of financial leasing. Therefore, in addition to a sublessee, the technical improvement may not be depreciated by users on whom or which the technical improvement has been passed by the assignment of a lease contract. A certain negative aspect of the proposed change is a relating transitional provision based on which the new regulation applies only to new technical improvements, i.e. completed and brought into a condition fit for ordinary use after legal effects of the amendment, i.e. after 1 January 2017. Moreover, technical improvement of the old technical improvement is not considered new technical improvement. Liquidation of Property in Connection with New Development If a building is liquidated in connection with development of a new building, a net book value of the liquidated building, including liquidation costs, will be included in the entry price of the new building. However, pursuant to the existing regulation, this is based on the net book value. In this case, the Income Taxes Act does not deal with a possible difference between the net book value and the tax book value. The amendment removes the above-mentioned discrepancies and sets forth that the entry price of the new building will include the tax book value of the liquidated building. In this respect, the amendment contains no transitional provision and thus the new regulation should be applied to the buildings brought into use after the legal effects of the amendment, i.e. after 1 January 2017. 3

Taxes Furthermore, the amendment does not deal with an unfavourable situation of repeated technical improvements of buildings (fit-outs of shops) which usually occur in the intervals of 5 to 10 years and by which the previous technical improvement is removed. In such a case, an owner must repeatedly increase the entry price of the original building by individual technical improvements, including the liquidation costs. Depreciation of Intangible Another change which is in favour of taxpayers relates to intangible assets the taxpayer is not entitled to use for a definite period of time. Such assets are currently subject to depreciation for a fixed period prescribed by law, e.g. an audiovisual work for 18 months, software and intangible results of research and development for 36 months and other intangible assets for 72 months. The amendment defines this period only as a minimum period of time. The taxpayer may choose a longer depreciation period which corresponds to the actual use of the particular assets. However, pursuant to transitional provisions, the longer depreciation period may not be applied to the intangible assets by which the depreciation has already been started before the legal effects of the amendment, i.e. before 1 January 2017. Amendment Bill to the Value Added Tax Act 2017 In addition to the extensive amendment of the Income Taxes Act, the Ministry of Finance has been preparing an amendment of the Value Added Tax Act. It contains a total of 124 amending points and we will bring you the most important changes gradually. Now, we will focus on the extension of the reverse charge regime, the introduction of the concept of an unreliable entity, the extended liability for unpaid VAT and the repeal of the specific VAT regulation at a society. Further Extension of the Reverse Charge Regime With effects from 1 January 2017, the list of goods and services to which the reverse charge regime applies is to be extended. Czech Republic will take advantage of almost all possibilities given by the current version of the European Directive on the Common System of Value Added Tax. The so called local reverse charge regime will be newly applied to: > supply of staff for construction and assembly work; > supply of immovable property sold by a judgement debtor in a compulsory sale procedure; > supply of goods provided as security by one taxable person to another in execution of that security; > supply of goods following the cession of a reservation of ownership to an assignee and the exercising of this right by the assignee; > intermediation of the supply of investment gold which was exempt from VAT and regarding which the producer decided to claim VAT and the intermediary decided to claim VAT, when intermediating the supply of the investment gold; > supply of waste and scrap from hafnium. Introduction of Unreliable Entity In order to prevent from sham deregistration of unreliable VAT payers, who currently count more than six thousand, with the aim to release from their status of unreliability and register again as a VAT payer, the concept of an unreliable entity is to be introduced with effects from 1 January 2017. An individual or a legal entity who or which is not a VAT payer and who or which materially breaches their duties relating to VAT administration will be designated as an unreliable entity. An unreliable VAT payer whose registration has been cancelled becomes an unreliable entity by virtue of law. At the same time, if the unreliable entity or the unreliable VAT payer becomes a group member, this group as a whole becomes the unreliable VAT payer. To the contrary, if the VAT payer a group is deregistered, the members of such group become unreliable VAT payers on the date following the date on which this group ceases to be a VAT payer. Extended Liability for Unpaid VAT If the unreliable entity states VAT on a tax document issued despite not being a VAT payer, the recipient of the supply will be liable for the VAT unpaid. The recipient will also be liable when the consideration for a taxable supply is provided, in whole or in part, in a virtual currency pursuant to a legal regulation regulating some measures against legalization of profits from criminal actions or terrorism financing (e.g. Bitcoin). Repeal of Specific Regulation of VAT Registration and Administration of Societies The current version of the VAT Act includes a number of provisions which are necessary to remember if a taxable person is a member of a society (former association). Compared to a standard procedure, there is a special regulation under which the registration duty arises, for claiming VAT deduction, keeping records and so on. All the special regulations will be removed from the VAT Act with effects from 1 January 2017 and each partner will be assessed de facto on a separate basis and fulfil his tax liabilities independently. 4

Taxes Issue: October 2016 The provisions regulating payments of a taxable person who is or becomes a partner to a society within which the supply with the entitlement to VAT deduction is performed, and also a special method of turnover calculation are to be repealed. The ban that a member of a group cannot be at the same time a partner to a society has also been repealed. There are also repealed provisions setting forth quite unsystematic conditions for claiming VAT deduction applicable to VAT payers who provide taxable supplies as a partner to a society and which led for example to invoicing construction and assembly works between partners in a standard VAT regime (although there would be applied a reverse charge regime in all other cases). Duties to keep records are regulated as well. As the new legal regulation sets forth, each partner must report their information in the scope of activities performed within the society in their VAT return, recapitulative statements, control statements and in their own records for VAT purposes as well. Taxes Briefly Methodology of Sales Reporting The General Financial Directorate published a Guidance Note on application of the Act on Sales Reporting. Accommodation and catering services will be reported first, i.e. from 1 December 2016. The Guidance Note is available on the website www.etrzby.cz launched by the Financial Administration especially for the electronic sales reporting. Act on Proving the Origin of Property The lawmakers tightened the Act on Proving the Origin of Property up. A tax administrator may request a taxpayer to prove the difference between the income and assets accrual from the amount of CZK 5 Million. They consider the originally proposed threshold of CZK 7 Million too high. The Act becomes legally effective from the second month following the month in which the Act was published, i.e. no sooner than from this November. Since the Act had been submitted, it has been criticized by the professional community for its unsystematic character, inconsistencies, and retroactive effects. The Act does not exclude for the tax administrator to require a taxpayer to prove the origin of property acquired before the legal effects of the Act. In practice, it may happen that taxpayers will be indirectly forced to prove the incomes acquired in statutebarred periods. The Act brings legal uncertainty. New VAT Return Form Following amendment of the VAT Act No. 243/2016 Sb., a new VAT return form (template 20) and new instructions to fill out the VAT return (template 16) were published. Compared to the previous template, minor changes have only been made. The structure of XML files remains the same. For the control statement, the name of Section A.2 is being changed and the relating instruction is being slightly adjusted. Contact details for further information: Ing. Alexander Novák, LL.M. Tax advisor / Senior Associate Phone: +420 233 111 261 E-mail: alexander.novak@roedl.cz Ing. Martina Šotníková Tax advisor Phone: +420 233 111 261 E-mail: martina.sotnikova@roedl.cz > Judicial decisions Lenka Krupičková, Rödl & Partner Prague Arrangement of a Lump-sum Remuneration Does Not Release Taxpayers from Burden of Proof In a recent judgement, the Supreme Administrative Court (the SAC) has dealt with conditions of tax deductibility of costs for a lump-sum remuneration paid by a customer of services. Particularly, it concerned a situation where an operator of a laundry had paid a lump-sum monthly amount to a supplier who should have provided the operator with external foreign workers to help in the laundry in the afternoons and at the weekends. During a tax audit, a tax administrator required a taxpayer to demonstrate the performance of work by this supplier and came to conclusion that the receipt of services in the 5

Taxes / Economics scope claimed had not been demonstrated. Therefore, it did not recognize the remuneration paid as tax deductible costs. During a subsequent judicial review, the SAC primarily dealt with an objection concerning the assessment of criteria for reduction of a taxable amount. The operator of the laundry defended the tax deductibility of the costs incurred for the remuneration for the supply of manpower among other things by the fact that with regard to the lump sum nature of the remuneration, it had been irrelevant as to whether the work had been actually performed in the particular period of time or to what extent. In this respect, the SAC based its opinion on its settled case law regarding general conditions a taxpayer must meet in order to claim certain costs as tax deductible. In the opinion of the SAC, the conditions are: 1) the costs were actually incurred, 2) in connection with gaining a taxable income, 3) in the given tax period, 4) in compliance with the law. In this particular case, the operator of the laundry was obliged to demonstrate that the lump sum remuneration paid for the supply of manpower had been incurred for the services actually provided which, at the same time, had been aimed at securing, maintaining and attaining taxable income. If the workers supplied under a contract actually participated in the operation of the laundry, the payment for the work performed could be tax deductible. However, in the situation where the payment were without adequate consideration (situation which may be resolved easily from the civil law point of view), it would not be a service aimed at securing, maintaining and attaining taxable income and it would not be tax deductible income. The only fact that a lump-sum remuneration was arranged for the supply of manpower does not release a tax entity from the duty to demonstrate that the service has been actually provided and meets the requirements resulting from Section 24 of the Income Taxes Act. In this particular case, the SAC agreed with the conclusion of the tax administrator that the provision of services in the scope claimed had not been demonstrated by testimonies of witnesses. Contact details for further information: > Operating lease is to be reported on a company s balance sheet Radim Botek, Ladislav Čížek, Rödl & Partner Prague Introduction > The International Accounting Standards Board (IASB; in cooperation with FASB) issued a new standard IFRS 16 that changes the principles for the recognition of operating lease. New IFRS 16 replaces the previous leases standard, IAS 17, valid to date, and any related interpretations. The crucial piece of information that could also be quite positive for the users is that IFRS 16 will be effective from 1 January 2019. A company may choose to apply IFRS 16 before that date only if it also applies IFRS 15 Revenue from Contracts with Customers that sets out the principles for revenue. In addition, we must say that this standard has not yet been approved by the European Union. It means that, to date, there has been no change in the concept of IFRS already accepted by the EU. The key change introduced by this new IFRS 16 is a new method of recognizing operating leases by lessees. Under this new standard, it is required to report both types of leases (finance and the traditional operating lease) on a company s balance sheet. As for finance leases, the reporting will remain unaffected. As for operating leases, the key principle is to recognize the right to use an asset under the same category of assets as the assets that are factually similar. As already done for the category of finance leases in the past, the leases measurement will reflect the current value of operating lease payments. This is based on the argument that assets leased by a company under operating lease may generate certain revenue for the company. Hence, this asset (the right to use the assets) should be reported on the company s balance sheet and depreciated as usual. Basically, such recognition reflects an economic ownership of intended assets. By analogy, the liabilities arising from these operating leases are also to be Mgr. Lenka Krupičková, LL.M. Attorney-at-law, Tax advisor / Senior Associate Phone: +420 233 111 261 E-mail: lenka.krupickova@roedl.cz Source: Rödl & Partner Archive 6

Economics Issue: October 2016 reported in the balance sheet. In the income statement, the change introduced by the standard will be reflected by the fact that the right to use the assets will be depreciated. As a result, when reporting the leases, lessees will no longer distinguish between finance and operating leases. Below, you can find an example of different reporting introduced by the new standard: Balance sheet Finance lease Liabilities IAS 17 Operating lease 0 Liabilities 0 Off balance sheet assets: 0 Off balance sheet assets: Off balance sheet liabilities: 0 Finance lease Liabilities IFRS 16 (from 2019) Off balance sheet liabilities: Operating lease Liabilities Off balance sheet assets: 0 Off balance sheet assets: 0 Off balance sheet liabilities: 0 Income statement Off balance sheet liabilities: 0 IAS 17 Finance lease Operating lease Revenue 0 0 Costs services (lease repayments) 0 22 EBITDA 0 978 Costs deprecation and amortisation) 20 0 EBIT 980 978 Costs interest 2 0 EBT 978 978 IFRS 16 (from 2019) Finance lease Operating lease Revenue 0 0 Costs services (lease repayments) 0 0 EBITDA 0 0 Costs deprecation and amortisation) 20 20 EBIT 980 980 Costs interest 2 2 EBT 978 978 As indicated in these tables, this change in the principle for recognition of operating leases will also affect some key financial metrics and indicators. This cannot be forgotten because some of the metrics and indicators are closely monitored by the shareholders, banks, by the parent company or the so-called KPI of certain key managers are calculated from these metrics. The change in the recognition principles will result in a change in metrics values and this will have to be taken into account when preparing various annual financial analysis. The table below summarizes the basic changes introduced by the new standard, IFRS 16: Indicators EBIT EBITDA Total debt to equity Liquidity (quick ratio) turnover ROCE Operating cash ouflows Total cash flow Standard calculation method income statement EBIT + deprecations accounts payable / equity (short-term assets) / (short-term liabilities) sales / assets EBIT / (equity + finance liabilities) various methods various methods Anticipated implications on reporting (ceteris paribus) Will be higher, because some of the current costs of lease (services) will be moved to the finance part as costs interest. Will be higher, because the currently reported lease paymetns will be reported under depreciations and costs interest Will be higher, because the finance liabilities of the company will be higher. Will be lower, because the short-term liabilities of the company will be higher, whereas the short-term assets will be not. Will be lower, because the total value of assets will be higher if the sales will be the same. This cannot be said for sure; it will always depend on the lease contract. Will be higher, because at least some of the currect payments will be newly reported under the financial cash flows. No changes; there are not changes for cash transactions. Let s assume (as presented in the table) that the total lease payments for operating lease do not change, it will only be divided into depreciations and interest. It might not be as clear at the first sight, but the change in reporting will affect both the balance sheet and the income statement plus the cash flow statement ( CF ) even though its total amount will remain the same. As already indicated in this table showing the implications for some selected financial metrics, operating cash outflows will increase. A certain part of the current lease payments payments of longterm liabilities will be now reported under financing cash outflows. 7

Economics Source: Rödl & Partner Archive It is vital to emphasize that, even though a lease itself and all related services (insurance, fleet management) are often combined in a single contract, it is required under IFRS 16 to distinguish between a lease and a service, as already done in a similar way for finance leases. This standard requires only the amount related to the lease to be reported on the balance sheet. This may result in some difficulties when determining the amount corresponding to the lease if the contract only specifies one payment that is not itemized. At this point, it might be more than appropriate to say that the operating lease is, in fact, a lease (in Czech pacht or usufructuary lease ) and, hence, it includes any leases of offices, manufacturing halls, warehouses etc. Almost every company would have such a lease. As in most of other standards, there are exemptions applicable to IFRS 16. IFRS 16 does not require a company (a lessee) to recognize the asset (the right to use the asset) relating to the operating lease if it is a short-term lease (i.e. leases of 12 month or less) and if it is a lease of lowvalue assets. The standard defines that when it is being assessed whether or not the asset is a low-value asset it should be measured regardless of its age (it is always vital to measure the value of assets as if it was new ). In addition, it is vital to assess whether or not the value of asset is low regardless of the nature of the reporting entity (such as, its size, balance sheet total, the value of fixed assets etc.). As a result, it is anticipated that different lessees will reach the same conclusion as to whether a certain underlying assets is a low-valued asset. Explicitly, it is specified that cars should never be treated as a low-valued asset. On the other hand, low-valued assets are typically tablets and personal computers, small pieces of office furniture or phones. As for lessors, IFRS 16 assumes all requirements defined under the currently used IAS 17. It means that, when reporting, a lessor is still required to distinguish between finance and operating leases and there will be no change. Perhaps, you ask yourselves the same way we ask ourselves why do we need this change? The IASB states that this change in principles for the lease recognition goes in line with changes and requirements of the 21 st century. The main reason is that a lot of companies have a significant amount of liabilities that are reported off balance sheet and, thus hidden under operating leases. It is reported that listed companies preparing its reports under IFRS (or US GAAP) do not recognize up to USD 3 trillion. It means that the new standard assists companies in being more transparent when reporting leased assets and any related liabilities. This should result in a better comparison between the companies that generate their revenue through assets leased under the operating lease and the companies that acquire these assets. In addition, we wish to mention that, even though the international accounting standards actively deal with the proper recognition of operating leases and, now, come to a conclusion that the operating lease, i.e. a simple lease should also be reported on the company s balance sheet, the Czech accounting standards do not yet report the finance lease on a company s balance sheet. When compared with the modern Slovak or German legislation under which the finance lease has been already reported for a number of years, the Czech accounting standards are rather outdated as far as the reporting of leases is concerned. 8

Economics Issue: October 2016 Reporting the finance leases off the balance sheet already complicates the process of preparing reporting packages and final reports for the consolidation purposes. If the operating leases are to be capitalized under assets, this new principle for recognition of leases will complicate this reporting process even more. However, strictly economically speaking, as reflected under the principle of representing a true and fair view of the company s financial situation and results, these assets bring some economic benefit to the companies and, thus, should be recorded on the company s balance sheet. Conclusion IASB issued the new standard that governs the principle for recognition of leases IFRS 16. IFRS 16 will be effective from 2019. According to this new standard, the right to use the assets stipulated under an operating lease contract should be reported on the balance sheet prepared by a lessee. It is some kind of a compromise between IASB and FASB that brings closer the IFRS and US GAAP (even though there are still some differences). By contrast, yet another difference comes up between the Czech Accounting Standards and IFRS that would complicate even more the transition of accounts from HBI to IFRS. Nevertheless, we must emphasize that the EU has not yet approved this standard. Hence, the changes in Czech way of reporting should not be as dramatic. And as far as the books of a lessor are concerned, there are no material changes. Contact details for further information: Ing. Radim Botek Auditor / Associate Partner Phone: +420 236 163 305 E-mail: radim.botek@roedl.cz Helping our clients grow > 25 years in the Czech Republic Building Foundations Our experise and experience lay the foundations for our advisory services. On those foundations we build, together with our clients. Rödl & Partner Our unique human towers needs a strong and solid foundation Castellers de Barcelona Each and every person counts to the Castellers and to us. Human towers symbolise in a unique way the Rödl & Partner corporate culture. They personify our philosophy of solidarity, balance, courage and team spirit. They stand for the growth that is based on own resources, the growth which has made Rödl & Partner the company we are today. Força, Equilibri, Valor i Seny (strength, equilibrium, valour and common sense) is the Catalan motto of all Castellers, describing their fundamental values very accurately. It is to our liking and also reflects our mentality. Therefore Rödl & Partner embarked on a collaborative journey with the representatives of this long-standing tradition of human towers Castellers de Barcelona in May 2011. The association from Barcelona stands, among many other things, for this intangible cultural heritage. Imprint: Mandantenbrief October 2016 MK ČR E 16542 Published by: Editorial board: Rödl & Partner Consulting, s.r.o. Platnéřská 2, 110 00 Prague 1 Phone: + 420 236 163 111 www.roedl.cz Ing. Jana Švédová jana.svedova@roedl.cz Layout/Typeset by: Rödl & Partner publikace@roedl.cz This newsletter is an information booklet intended for general informative purposes. The information is not advice, should not be treated as such, and you should not rely on the information in the newsletter as an alternative to legal, taxation, financial, accountancy or corporate advice. Although we prepare the information for the newsletter with utmost care, we do not represent, warrant, undertake or guarantee that the information in the newsletter is correct, accurate, complete, non-misleading or up-to-date. Since the information presented here do not discuss specific cases of particular individuals or corporations, you should always verify the information applicable to your circumstances by consulting an appropriately qualified professional. We disclaim liability for any decisions made by readers based on information in our newsletters. Our advisors will gladly assist you with any questions on topics presented here or with any other matters. The entire contents of our newsletters as published on the internet, including the information presented here, represent the intellectual property of Rödl & Partner and are protected by copyright laws. Users may download, print or copy the contents of the newsletters for their own needs only. Any modification, reproduction, distribution or publication of the contents of the newsletter, in whole or in part, whether online or offline, is subject to a prior written consent of Rödl & Partner.