Keeping track of all tax-related measures published so far in connection with the coronavirus pandemic might be quite difficult. To help, below we are providing you with practical recommendations sorted by individual tax areas.

Europe continues to be a sellers' market. All countries across Europe now apply “seller-friendly” risk allocation techniques, while the US continues to firmly favour the buyer. These conclusions were published by CMS today in the 12th edition of its annual European M&A Study, a multi-year analysis of the key legal provisions within M&A agreements. The study is the most comprehensive of its kind and is based on a proprietary database comprising more than 4,600 deals.  In identifying the primary deal drivers for transactions, CMS revealed that almost half of deals represented buyers entering a new market (46%) or acquisitions of know-how or acqui-hire transactions (41%). The proportion of these transactions both increased since 2018 (32% and 23% respectively). One fifth of the deals represented the acquisition of a competitor.  Stefan Brunnschweiler, Head of the CMS Corporate/M&A Group, said: “We are seeing demand for deal certainty in the unpredictable macroeconomic context, greater use of clever risk allocation strategies, as well as new cutting-edge technologies benefitting the industry. The M&A Study 2020 will be a useful guide for those considering transactions in a more and more challenging investment climate.” Key findings for 2019 include:  Upward trend of legal technology tools – AI and document automation were used in numerous of the reviewed transactions, often leading to significant cost savings. Rise in popularity of Warranty & Indemnity (W&I) insurance – up by 2% to 19% of all deals but used in almost half of deals valued over EUR 100m.  Gradual decline of purchase price adjustments (PPAs) – in 45% of all deals, up one-percentage point from the previous year, but significantly behind the average level for the previous three years.  Upward trend of locked box structures continues – in 56% of deals with no PPA, highlighting parties’ wish for as much certainty as possible. de minimis and basket provisions becoming the market norm – now applying in majority (73% and 66% respectively) of transactions, most likely reflecting the increasing use of W&I insurance. Liability caps determined by deal size and W&I insurance – overall cap in smaller deals most likely to be full purchase price, compared to only 10-25% for larger deals. Additionally, almost half (45%) of W&I deals have caps of less than 10% of the purchase price, compared to only 10% of non-W&I deals.

Grant Thornton would like to inform you that the Government of the Czech Republic approved the bill of the Ministry of Finance this week to adopt further tax measures in connection with the extraordinary event caused by the spread of the coronavirus (so-called Liberal Aid Package No. 2). We briefly present the individual proposed measures in the following summary: 

In view of the current situation, the Ministry of Finance has extended the Tax Liberation Package with further measures. It waives the obligation to pay advance payments for PIT and CIT due in June 2020. With regard to income tax, it also introduces the "loss carryback" measure for 2020, whereby it will be possible to apply the tax loss for the current year retrospectively in the tax returns for 2019 and 2018.