Abstract
The aim of the article is to analyse the efficiency of the CFC rules that should become part of the Czech Income Tax Act due to the transposition of the ATA Directive. The analysis focuses on particular aspects of the proposed CFC rules, detects their crucial imperfections and comes up with the solution how these loopholes could be tackled in order to fulfil the object and purpose of these rules.
For this purpose theoretical and practical knowledge are taken into account including knowledge gathered from other countries where these rules have been enacted for a long period of time. This paper, in its second part, deals with one of two main flaws that render the proposed CFC rules almost useless.
This imperfection consists of the rules laid down for the purpose of determination whether the subject is CFC or not.