Experience with cross-border mergers from the Czech Republic
Experience with cross-border mergers from the Czech Republic

Summary/Abstract: Cross-border mergers are a substantial topic in the European Union, since this issue is associated with free movement of capital. This is why directives concerning cross-border mergers have been issued. This article analyzes cross-border mergers in the Czech Republic, and the possible reasons for their limited use. The accounting concept of the decisive date deviates from the legal concept of the merg-ing companies’ legal existence. Determination of the decisive date according to the local law of vari-ous member countries thus varies because each state may modify or adapt the Tenth Directive in accordance with their own legal systems. Harmonisation of accounting for cross-border merger within the EU is, however, regulated inadequately. Such missing harmonization of accounting aspects of mergers results in a situation where each state adopts its own „customized” regulation. This would not be wrong if it did not involve cross-border mergers where mutual compatibility is necessary. Income tax advantages may be gained in cross-border mergers. At this point, however, tax advantages could be at least described as problematic or even unattainable. As a way out of this difficult situation, there appears to be an amendment to the current laws and regulation of accounting in the EU Member States.

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