The disruption caused by Covid-19 to CEE’s M&A market was short-lived as dealmaking returned to the fore in the second half of the year, according to a new report published by Mazars in association with Mergermarket.

The unprecedented changes in the economic environment following the outbreak of COVID-19 have created unique challenges for setting prices in intra-group transactions. The correct setting or verification of transfer prices for the past year while observing the arm’s length principle has become a hot topic. In this respect, identifying the actual effects of the pandemic on a company, and comparing and assessing them will be of key importance.

Following the mandatory testing of employees at COVID-19 and the resulting ambiguity in the treatment of VAT, the financial administration decided to clarify the conditions for the exemption of these services from VAT. The Directorate-General for Finance states in official information that COVID-19 testing services, whether mandatory or self-paying, are exempt from VAT without the right to deduct. These services include not only antigen or PCR testing for the presence of the virus, but also testing for the presence of antibodies. This approach will be officially applied with effect from 1 April 2021. 

The VAT position of electronic interface operators will change dramatically from 1 July 2021. In connection with a planned amendment to the VAT Act relating to e-commerce, individual e-shops ensuring the sale of goods from foreign suppliers will have to assess whether they are operating as deemed suppliers.