Corporate Tax 2010 - BMR Advisors

Salans
Czech Republic
Czech Republic
A reduced rate of 15% applies to certain specified types of income
(dividends, profit distributions, liquidation surplus payments, etc.)
sourced abroad.
4.2 When is that tax generally payable
In general, the income tax must be paid not later than within 3
months from the end of the previous tax period (usually, but not
always, a calendar year). In certain cases including tax payable by
larger companies (the financial statements of which are subject to
mandatory audit) and by taxpayers whose tax return is being
submitted by a qualified tax advisor and who have notified the tax
authority of this in advance, the income tax is payable not later than
within 6 months following the end of the tax period.
In addition to the final settlement of tax due, taxpayers are also
liable to pay semi-annual tax advances on account of corporate
income tax if their most recent known tax liability has exceeded
CZK30,000 (approximately €1,200), or quarterly tax advances if
their most recent known tax liability has exceeded CZK150,000
(approximately €6,000).
revenues exempt from tax (e.g., income from small water
power plants) or revenues that are a part of a separate, and
not the general, tax base;
revenues taxed by withholding at a special tax rate; and
in certain cases, it is possible to lower the profits by amounts
accounted for as an expense in a preceding accounting period
provided that the payment thereof is made by the company in
the current period (e.g., contractual penalties, social security
and medical insurance).
4.5 Are there any tax grouping rules Do these allow for relief
in the Czech Republic for losses of overseas subsidiaries
No, Czech law does not recognise any income tax grouping rules
and taxation on a consolidated basis is not applied.
Tax grouping rules have been introduced for the purposes of VAT;
the application of the VAT tax grouping is, however, optional.
4.6 Is tax imposed at a different rate upon distributed, as
opposed to retained, profits
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4.3 What is the tax base for that tax (profits pursuant to
commercial accounts subject to adjustments; other tax
base)
The tax base for income from general business operations is
determined on the basis of profits pursuant to commercial accounts
(set up in accordance with the national accounting standards and
always free of any impact of the IFRS) subject to certain
adjustments (see question 4.4).
The tax base is determined differently in certain cases including
income subject to withholding tax, profit distributions and other
similar income sourced abroad, and taxation of some permanent
establishments of non-residents.
4.4 If it otherwise differs from the profit shown in commercial
accounts, what are the main other differences
The profits or losses ascertained on the basis of the commercial
accounts have to be adjusted (increased or reduced by certain items)
for the purpose of setting the tax base. The most notable difference
stems from the fact that the tax depreciation of fixed assets usually
differs from the accounting depreciation thereof.
The items increasing the tax base include for example, the
following:
amounts shown in the accounting which, according to the
Income Taxes Act cannot be included in expenses or can be
included therein only in a limited manner (e.g., disallowed
expenses such as business entertainment, remuneration of
corporate directors, costs relating to revenues excluded from
the tax base, certain travel expense reimbursements, certain
types of damages, interest that cannot be claimed due to the
thin capitalisation rules);
amounts not included in the accounting for which the tax
base is raised (e.g., non-cash income as a result of transfer
pricing policy); and
in certain events the profits must be increased by amounts
accounted for as an expense if not actually paid (contractual
penalties, social security and medical insurance).
The items reducing the tax base include, for example, the following:
amounts not included in the accounting for which the tax
base may be reduced (e.g., claim of a tax loss from previous
years, research and development project expenses);
No, taxation at the corporate level does not differentiate between
distributed and retained profits and the rate of corporate income tax
is not dependent on the fact whether the company allocates the
profit from its business activity or not.
4.7 What other national taxes (excluding those dealt with in
“Transaction Taxes”, above) are there - e.g. property taxes,
etc.
Other direct taxes applicable to legal entities are:
real estate tax; and
road tax.
4.8 Are there any local taxes not dealt with in answers to
other questions
In addition to the aforesaid taxes, there are no taxes imposed at the
local level. Local governments can, however, assess quasi-tax
payments known as “local fees”. From among a wide array of local
fees the following may be particularly relevant to companies as feepayers:
fees on admission;
fees on accommodation capacity;
fees on operation of winning game slot machines;
fees on using public area; and
fees on an improvement of a construction land parcel by
possible connection thereof to a water main or sewage.
5 Capital Gains
5.1 Is there a special set of rules for taxing capital gains and
losses
Generally, there are no substantial special rules for taxing capital
gains and losses.
Subject to the conditions set forth by Czech tax law capital gains
made on the transfer of a qualifying subsidiary are exempt from
corporate tax. (See question 5.3.)
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