"Navigating Global Changes: Insights on Tax Policies, Rental Regulations, and Reporting Strategies"

Due to evolving global regulations, keeping informed is more crucial than ever to seize opportunities and mitigate potential risks. In this edition, we explore significant advancements impacting international business.

• Tax debts in Peru: The recently published legislative decree no. 1634 introduces a special instalment programme for tax debts in Peru.
• Short-term rentals in Czech Republic: The new methodological guide clarifies what landlords need to consider.
• Connectivity Considerations and Boundaries of Different Annual Report Sections: Next steps and recommendations for companies

Overcome the complexities of the global market with valuable guidance.

Special instalment regime for tax debts in Peru: Terms, benefits, and exclusions

The recently published legislative decree no. 1634 introduces a special instalment programme for tax debts in Peru. It is managed by the Peruvian financial authority SUNAT and covers debts payable up to 31 December 2023. The Ecovis experts explain the details.

What are the most important changes?

• Applications for this instalment plan can be submitted until 20 December 2024.
• Eligible debts include income tax, VAT, selective consumption tax, mining special tax, customs duties, and others. The programme applies to debts with enforceable resolutions, payment orders, fines, or balances from existing instalment plans.
• Debts under dispute or in the collection process may also be included; however, for disputed debts, applicants must withdraw their claim upon applying for the instalment plan. SUNAT will notify the relevant authorities upon approval of the application.
• Certain debts and taxpayers are excluded from this programme, including debts under insolvency proceedings, withheld or collected taxes, and debts already settled with final judgments. Individuals or entities with convictions for tax or customs offenses are also excluded. Public entities are generally excluded, except for State enterprises.
• The programme offers a discount on interests and fines based on the debt amount and payment method—whether paid in full, in a summary plan, or through instalment payments of up to 72 months. A monthly minimum of PEN 260 (PEN=Peruvian sol, 100 PEN is the equivalent of around USD 27) applies to instalment plans, and in some cases, guarantees may be required. Approved instalment agreements will halt enforcement actions, while SUNAT retains its audit rights on debts not previously audited.

Are you affected by tax debts? We will support you in repaying them in accordance with the rules. - Octavio Salazar Mesías

Short term rental regulations Czech Republic: What landlords need to consider in the future

In October 2024, the Czech Ministry of Regional Development issued a regulation on short-term rentals. The new methodological guide to clarify the rules for short-term rentals applies in particular to apartments offered on platforms such as Airbnb. The Ecovis experts know what landlords must prepare for.

As formal legislative amendments are in process, this current guideline serves as an intermediary step, helping authorities distinguish between rentals and accommodation services.

Defining rental and accommodation services

A key component of the Ministry’s methodology is the clear distinction between “rental” and “accommodation” services, each carrying different regulatory requirements. Under current Czech law, long-term rentals fulfil the tenant’s housing needs and typically require less regulatory oversight. In contrast, accommodation services, such as those provided through Airbnb, satisfy only temporary accommodation needs and are considered as business activity. This classification requires providers to adhere to stricter business regulations, including obtaining a business license, registering guests, and potentially paying VAT and local accommodation fees. The methodology thus helps clarify that short-term rentals intended for temporary stays fall under accommodation laws and not housing rental laws.

Do you provide housing? Get advice from experts to ensure the new requirements are implemented correctly. - Mojmir Jezek

Requirements for Airbnb premises

According to the Ministry’s guidance, premises used for short-term accommodation must be licensed and properly categorised as “accommodation units” under the Czech Building Act. This requirement contrasts with standard apartments, which are designated for residential use. Building authorities can inspect properties and issue fines if they identify non-compliance. For instance, a property classified as residential cannot legally operate as an Airbnb without first obtaining a re-licensing permit as an accommodation unit. The Ministry also claims that the case of use “only to a minimal extent (both in area and time) for accommodation purposes” and further use by the landlord for living purposes, may mean that these stricter requirements may not be fulfilled.

EFRAG publishes paper on connectivity and reporting boundaries

The European Financial Reporting Advisory Group (EFRAG) has published a paper “Connectivity Considerations and Boundaries of Different Annual Report Sections” as part of its proactive research project on aligning financial and sustainability reporting. The paper introduces the concept of “connectivity”, which aims to link sustainability and financial reporting more effectively. It looks at how reporting in different sections of the annual report can be harmonized to reduce duplication and improve coherence.

Key benefits include enhancing the complementarity of sustainability and financial information, filling information gaps, improving the predictive value of sustainability disclosures, and supporting strategic communication within reports. The paper also highlights grey areas such as climate-related obligations, unrecognized intangible assets and synergies from M&A transactions, and recommends solutions such as the use of XBRL technology and the development of a sustainability reporting framework.

Next steps:

EFRAG plans to publish a discussion paper with illustrations of the linkages. Companies should prepare to adapt their reporting processes in line with EFRAG’s guidance and ensure that their financial and sustainability reporting practices are consistent and aligned with ESRS and ISSB standards.

Recommendation:

Companies should review the paper to better understand the principles of connectivity and apply these concepts to improve their annual reports. By addressing reporting gaps and overlaps, companies can improve transparency and comply with evolving EU and international sustainability reporting requirements.

Read the whole paper here: EFRAG