In a recently published decision, dated 19 April 2012 (No. 5 Afs 45/2011-94), the Supreme Administrative Court held that unrealized foreign exchange gains do not constitute taxable income for corporate income tax purposes.

Background
From 2004 to 2006, the taxpayer, a Czech-listed company, obtained long-term loans to finance real estate projects. The taxpayer had unrealized foreign exch…