Glatzova & Co. has helped Smartlook.com obtain a CZK 81 million Series A investment from Dutch investment company Airbridge Equity Partners and other unidentified investors.
Smartlook.com, which was founded in 2016, is a Czech startup that helps companies analyze user behavior on their website and mobile applications.
The Glatzova & Co. team included Partner Jan Vesely and Associate Jan Perinka.
Glatzova & Co. could not disclose further information about the transaction.
Glatzova & Co. has advised Raiffeisenbank on its provision of a CZK 215 million loan BesTen. Rutland Partners reportedly advised the borrower on the deal.
According to Glatzova & Co., the loan will be used for the purpose of “refinancing existing financing and providing financing to related parties.”
The Glatzova & Co. team consisted of Partner Martin Dancisin and Managing Associate Jarmila Tornova.
Rutland Partners’ team was reportedly led by Partner Josef Otcenasek.
Dentons’ Prague office has successfully represented Veolia Energie CR in a dispute with Czech tax authorities regarding interest from illegal gift tax.
According to Dentons, “the case concerned a gift tax imposed on all emission allowances allocated to power plants in breach of the EU law.” According to the firm, “after the European Court of Justice declared this tax illegal in the Skoda Energo case, the Czech tax authorities correctly reduced the tax but refused to pay the interest accrued as a result of the illegally imposed tax.”
The Czech Republic’s Supreme Administrative Court ruled that the tax authorities have to pay interest starting from the date when Veolia Energie paid the illegal tax.
The Dentons team included Partner Petr Zakoucky, Managing Associate Barbora Obracajova, and Associates Michal Pelikan, Justina Bodlakova, Jan Tyls, and Anna Urbanova.
Clifford Chance has advised the Aricoma Group on the acquisition of the Seavus technology company. Karanovic & Partners’ North Macedonian office provided advice pertaining to the local side of the transaction in Serbia, Bosnia and Herzegovina, and Albania. Seavus was reportedly advised by Bird & Bird’s Stockholm office.
Seavus is a software development and consulting company providing enterprise-wide business solutions. The company has over 800 IT experts worldwide and offers a variety of products and service options in Europe and the US.
The Aricoma Group, which is part of the KKCG Group, is the largest information and communications technology holding in the Czech Republic. It provides a wide range of services, starting with the design of ICT architecture, through infrastructure and cloud services and the implementation of corporate applications, up to the development of its own software solutions and outsourcing. According to Clifford Chance, “with this acquisition, the Aricoma Group penetrates further markets in Europe and strengthens its position in the USA. At the same time, it becomes an international player in the IT services industry, with consolidated revenues of EUR 300 million.”
Clifford Chance’s team included Partners Milos Felgr and David Kolacek, Counsel Michal Jasek, Senior Associate Dominik Vojta, Associates Jakub Vesely and Tomas Prochazka, and Junior Lawyers Martin Urban and Matej Ridky.
Bird & Bird’s team was led by Partner Jan Bystrom.
Dentons has advised the CPI Property Group on its new five-year term EUR 700 million revolving credit facility with ten international banks, including Banco Santander, Barclays, Credit Suisse, Goldman Sachs, HSBC, J.P. Morgan, Komercni Banka, Raiffeisen Bank AG, UniCredit, and Bank of China. Allen & Overy’s London office reportedly advised the banks on the deal.
According to Dentons, the new facility will replace CPIPG’s existing EUR 510 million revolving credit facility.
This deal marks another in a string of transactions Dentons advised the CPIPG on. The firm recently advised the group on the issue of EUR 525 million subordinated notes callable in November 2026 (as reported by CEE Legal Matters on September 25, 2020).
CPI Property Group is a developer of real estate in Central and Eastern Europe. The company’s property portfolio is valued at EUR 9.8 billion, with occupancy of 94.8%.
The Dentons team included, in Prague, Partner Jiri Tomola and Senior Associate Martin Mandulak, and in London, Partner Catherine Astruc and Senior Associate Adam Jones.
Former Randl Partners lawyer Ondrej Chlada has joined DLA Piper in Prague as Head of Employment.
According to DLA Piper, Chlada has more than ten years’ experiences in Labor law, Litigation, and other related areas such as immigration, illegal employment, discrimination, agency work, and the legal status of statutory bodies and with issues of home office work.”
Chlada has a Master’s degree from the Masaryk University in Brno. He spent almost 12 years with Randl Partners.
“I really appreciate the opportunity to cooperate with DLA Piper,” said Chlada. “I believe that I will be able to make full use of my experience in my new role and provide high level services for DLA Piper clients. I look forward to working in the environment of a leading global law firm and cooperating with my new colleagues on interesting projects not only in the Czech Republic but also around the world. I am also excited about facing new challenges, which, thanks to its breadth and diversity, Labor law undoubtedly brings.”
“With Ondrej’s appointment we have added significant capacity to our employment practice which will help us further strengthen our position on the market and provide our clients with unique services in this dynamically developing area of law,” said DLA Piper Country Managing Partner Miroslav Dubovsky. “I am sure that with Ondrej’s skills and experience we will continue to develop our leading position in this area of law. It is my pleasure to welcome him and I am very much looking forward to our future cooperation.”
The current Covid-19 situation has changed many aspects of the business environment, and the resulting economic slowdown has prompted legislators worldwide to take measures to ease the situation for local economic players. Thus far, measures proposed by the Czech Government have generally only deferred tax liabilities and tax administrative duties, rather than eliminating them altogether. Of the few permanent types of relief from public duties, a proposal to abolish the Czech real estate transfer tax (RETT) is probably the most significant.
The RETT has been a fixed aspect of real estate transfers in the Czech Republic since 1993, when the Czech tax system was completely reformed after the fall of the communist regime and the country’s subsequent split with Slovakia. Until 2013, the transferor was liable for paying the RETT. Then, from 2014 to 2016 the party responsible for paying the RETT depended on the legal form of the transfer and the provisions of the contract. Since 2016 RETT liability has shifted to the transferee (in line with this transfer of liability, it also became known as the real estate acquisition tax). Throughout, the RETT’s rate – 4% of the value of real estate transferred for consideration (it does not apply to gratuitous transfers) – has remained consistent, and it has always applied only to asset deals. Company share transfers with assets consisting of real estate (share deals) have never been subject to the RETT, as share transfers do not involve transfers of title to real estate – the triggering element for the RETT.
Against this background, the question arises whether the proposed abolition of the RETT will have any major impact on the form of transfers of real estate in the Czech Republic.
In this regard, it is important to remember that share deals can be structured to benefit from the Czech corporate income tax participation exemption for capital gains resulting from share transfers. This, combined with the fact that share deals are not subject to the RETT, means that share deals have been the prevailing method for disposing with commercial real estate in the Czech Republic. As asset deals are not exempt from corporate income tax (which is 19% on capital gains), and as share deals benefit from the Czech participation exemption, it is likely that real estate deals will still be carried out as share transfers even after the RETT is abolished.
This will be the case especially in situations where substantial gains are accumulated in the tax records of the transferor. For share deals involving acquisitions of real estate, where – for tax purposes – the real estate is valued for the transferor at its historically applied tax net book value, such accumulated taxable gains could be expected to exist. In these situations, abolishing the RETT will likely have no effect on the structure of the transactions, as share deals will still enjoy a corporate income tax advantage.
On the other hand, when contemplating a transfer of real estate with depreciated value, such that a loss is expected on its sale, or where the transferor has tax losses brought forward from previous periods that could be used to offset any gains on the contemplated transfer of real estate, structuring it as an asset deal may be attractive from a Czech tax perspective. Abolishing the RETT will, of course, make the asset transfer even more attractive.
At the time of writing, the RETT has not yet been formally abolished. The bill abolishing the RETT has been approved by the Czech Parliament (lower house), but the Senate (upper house) has proposed modifications, and approval of the modified form of the bill needs the approval of the Czech Parliament. Once approved, it will be signed by the Czech president and published in the Czech Collection of Laws and become effective. While this will take some time, it is widely expected that this process will be completed by fall 2020. The good news is that under the proposed wording of the bill, the RETT will be abolished for transfers that were effective from December 1, 2019 – i.e., retroactively.
Whether abolishing the RETT will have the effect of reviving the Czech real estate market remains unclear, as obligatory rent deferral legislation and uncertainties in the Czech Government’s fiscal policy may prove to have a stronger negative effect on it.
By Martin Svalbach, Head of Tax, PRK Partners
This Article was originally published in Issue 7.9 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
BPV Braun Partners has advised Generali Investments CEE, an investment company acting on behalf of the Generali Real Estate Fund, on the acquisition of an early 20th-century building in Prague from Ferd s.r.o. Ferd was reportedly advised by AK Svec Rychterova on the transaction.
The transaction was made via the acquisition of a 100% ownership interest in Soukenicka 1086, s.r.o., which owns the building. Financial value were not disclosed.
BPV Braun Partners’ team included Partners Gabriela Spak Porupkova and Miroslav Dudek and Attorney Pavlina Tejralova.
Editor’s note: After this article was published, Svec Rychterova confirmed its involvement to CEE Legal Matters. The firm’s team included Partners Pavel Svec and Katerina Rychterova.
Kocian Solc Balastik has advised ING Bank Slaski on financing to an unidentified borrower for the acquisition of two LET Aircraft Industries L-410 UVP E-20 aircrafts, which also included special packages containing radars, long-range observation systems, SATCOM datalink, automatic vessel ID system, rescue equipment allowing for carrying out maritime patrol tasks, and hardware for supporting maritime SAR operations.
According to KSB, “the L-410 is a high-wing turboprop aircraft manufactured in the Czech Republic and designed to operate even in extreme climatic conditions. It carries up to 19 passengers and is used in more than 60 countries across five continents.”
KSB’s team included Partner Jiri Hornik and Senior Associate Ivo Prusa.
Kocian Solc Balastik did not reply to our inquiry on the matter.
Glatzova & Co has advised Bike Fun Nederland B.V. on the sale of Bike Fun International, a company based in the Czech city of Koprivnice, to ConsilTech. HKR advised ConsilTech on the deal.
Glatzova & Co describes Bike Fun as “the largest bicycle manufacturer in the Czech Republic.”
Glatzova & Co’s team was led by Partner Jiri Sixta and included Lawyers Nela Cekalova and Jan Perinka.
HKR’s team included Partners Jan Hraba and Lukas Krecek and Trainee Michal Havel.