Czech koruna´s appreciation in view of accounts and taxes

The Czech National Bank stopped on 6.4.2017 the exchange rate interventions. It is expected the koruna’s appreciation from a long-term point of view, according to some opinions also less than 26 CZK/EUR.
The impacts of koruna´s appreciation on businesses will depend on the kind of undertaking and the methods of financing. There are several typical situations:

Czech companies issuing invoices in EUR shall be prepared to a decrease in revenues in CZK. This will be visible above all in case of companies providing hired labour that have to pay most inputs in CZK.

Existing obligations in EUR that will be paid after koruna´s appreciation will generate exchange gains. The same applies in case of long-term obligations in EUR, e.g. loan from parent company. In such a case, when converting the obligation on the last day of the accounting period, there will unrealised foreign currency gains caused by the exchange difference between the CNB exchange rate used in the annual accounts before koruna´s appreciation and the rate after appreciation. In case of existing claims in EUR we can expect currency losses after the appreciation.

All exchange differences will influence the income statements of the company and are fully relevant for the income tax.

publikováno 10.04.2017
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