Supreme Administrative Court confirms: unrealized foreign exchange gains not taxable

In a recently published decision, dated 25 January 2013 (No. 5 Afs 56/2012), the Supreme Administrative Court upheld its earlier jurisprudence that unrealized foreign exchange gains were not taxable.

Background

The taxpayer, MP Development, was a joint-stock company resident in the Czech Republic. The taxpayer had initially included unrealized foreign exchange gains in its 2007 taxable income. Subsequently, the taxpayer filed an appeal against its 2007 assessment arguing that th…