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When a ‘group instruction’ becomes a transfer pricing and directors’ liability problem
A recent Czech Supreme Administrative Court decision (3 Afs 165/2024‑67) is a timely reminder that transfer pricing is not only about invoices and formal agreements. For tax purposes, economic reality prevails: if a Czech subsidiary absorbs costs or risks arising from a parent company’s strategic decision without arm’s‑length compensation (or other adequate consideration), the tax authorities may deem it a controlled transaction and adjust the tax base. This remains true even if the strategic instruction is wholly informal or unwritten. There is also a second, often underestimated, layer not explicitly addressed in the judgment: the legal obligations of local management under Czech law. And although this may
Starting the new year with a successfully completed deal – Kinstellar advises E.ON on the sale of its Czech gas distribution business to CEZ Group
Kinstellar has successfully advised E.ON on the sale of 100% of the shares in Gas Distribution, the operator of the gas distribution network in the South Bohemian Region and parts of the Vysočina Region in the Czech Republic. The buyer, CEZ Group, has completed the acquisition through its subsidiary GasNet, thereby significantly expanding its gas distribution footprint across the country. Kinstellar's engagement spanned the full lifecycle of the transaction, including the preceding corporate reorganisation of E.ON's Czech operations involving a simultaneous spin-off and hive-down of its electricity and gas distribution businesses, regulatory approvals, advice relating to vendors’ due diligence, preparation and running
Kinstellar advises E.ON on the sale of its Czech gas distribution business to GasNet
Kinstellar acted as legal counsel to E.ON in connection with the sale of its wholly owned subsidiary, Gas Distribution, to GasNet. The transaction, which is among the largest signed in the Czech Republic this year, involves gas distribution business in South Bohemia and parts of the Vysočina Region. Completion remains subject to customary regulatory approvals. Kinstellar's engagement spanned the full lifecycle of the transaction, including the preceding corporate reorganisation of E.ON's Czech operations involving a simultaneous spin-off and hive-down of its electricity and gas distribution businesses, advice relating to vendors’ due diligence, preparation and running of the auction process and negotiation of the
Kinstellar advises on the combination of KTP Kunststoff Palettentechnik and conTeyor Group
Kinstellar has successfully advised on the Czech law aspects of the combination of the businesses of Germany-based KTP Kunststoff Palettentechnik, a portfolio company of VR Equitypartner, and Belgium-based conTeyor International, majority-owned by Gilde Equity Management. The transaction creates a leading group in the sustainable packaging sector, combining KTP's foldable container expertise with conTeyor's textile inner packaging solutions. The newly formed group is expected to generate sales of approximately EUR 200 million annually and employ around 1,000 people. The Kinstellar team in Prague was led by Karla Rundtová (Partner) and included Adam Němec (Managing Associate) and Tereza Holubová (Senior Associate)