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Dentons Wins Important Tax Case for Sev.en EC in Czech Supreme Administrative Court

Dentons Wins Important Tax Case for Sev.en EC in Czech Supreme Administrative Court

Czech Republic
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Dentons has successfully represented Sev.en EC, a.s., a member of the Czech Coal group, before the Supreme Administrative Court of the Czech Republic in what the firm calls "extraordinary litigation" related to the reimbursement of gift tax from the Czech state that was imposed on the free carbon dioxide emission allowances in 2011 and 2012 in breach of EU law.

The Czech Coal group includes Severni Energeticka, Elektrarna Chvaletice and other companies, and is one of the largest producers of coal and coal-based electricity in the Czech Republic.

According to Dentons, "the Supreme Administrative Court decided the case in favor of Sev.en EC, and ordered the tax authority to return the illegal tax and pay almost 15% in interest on the due amount. The ruling sets an important precedent, which will affect many operators throughout the Czech Republic. The case was strongly driven by EU law, as the illicit tax was a result of a wrongly transposed Directive. The Court ruled the that the tax authority is obliged to know all legal norms on which the tax is based, including EU law, and in case of discrepancies, it is obliged to disregard national tax regulation in favor of directly applicable EU law. Therefore the conduct of the tax authority was indeed illegal and it has to be remedied through the award of interest."

Dentons Partner Petr Zakoucky, Head of the the firm's Energy group in Prague, led the team handling the case, supported by Associates Barbora Obracajova and Michal Pelikan. According to Zakoucky, “the litigation included several unique aspects, never before litigated before the Czech courts. The Court’s ruling sets a significant precedent, which will hopefully influence the operations and conduct of Czech tax authority. This applies not only with respect to emission allowances, but also for the entire tax system in the Czech Republic.”

Czech Republic Knowledge Partner

HAVEL & PARTNERS, attorneys-at-law, with offices in Prague, Brno, Bratislava, Pilsen, Olomouc, and Ostrava, has a team of 220 lawyers, tax advisors and 500 employees in total, is the largest independent law firm in Central Europe.

Our clients include large international companies, leading Czech and Slovak firms, including strategic state-owned companies and public sector authorities, as well as medium-size businesses, individual entrepreneurs, and investors. We advise approximately 100 of the Fortune 500 companies, and almost 50 of the Czech Top 100 companies. HAVEL & PARTNERS currently provides its services to a total of 2,000 clients. We have the most comprehensive international support available to both Czech and Slovak law firms. We provide legal and tax advice in 12 world languages in more than 90 countries around the globe. Up to 70 % of the transactions we deal with involve an international aspect.

HAVEL & PARTNERS was named the best law firm operating in the Czech Republic by the prestigious British rating agencies Chambers and Partners (2020) and Who’s Who Legal (2018, 2019). It is also the most successful law firm, providing the most comprehensive legal services in the Czech Republic and Slovakia, based on the total number of all nominations and awards in all years of the Law Firm of the Year awards. The firm became the absolute winner of this competition four times in the last six years, receiving the main award Domestic Law Firm of the Year in the Czech Republic (2015, 2017, 2018, 2020) and ranking as one of the most recommended law firms in all categories of law. Our company is also a three-time winner of the Law Firm of the Year award for Best Client Services (2015, 2016, 2019). In the field of M&A, HAVEL & PARTNERS is the best law firm in the Czech Republic based on the annual International Advisory Experts awards (2018, 2019). In Slovakia, it also won the prestigious global M&A Today Awards (2013–2018) for Mergers & Acquisitions six times in a row, and repeatedly won first place in the ranking by Lawyer International Legal 100 (2017, 2018). Prestigious international rating agencies EMIS DealWatch and Mergermarket have ranked HAVEL & PARTNERS among the leading law firms by the number of transactions completed in the entire CEE region since 2009. Based on annual awards of the Acquisition International magazine, HAVEL & PARTNERS has become the Law Firm of the Year 2019 in the M&A category in the CEE region.

Firm's website: https://www.havelpartners.cz/en/

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