Survival of the Richest

Czech Republic
According to the 2015 Financial Secrecy Index, the Czech
Republic has the fourth lowest level of financial secrecy
out of all the 18 countries included in this report (ranked at
number 81 at the global level). 297 In other words, the Czech
Republic has low levels of financial secrecy.
Taxation
Tax treaties
Since September 2015, the Czech Republic has signed a new
tax treaty with Turkmenistan, 298 among others, and treaties
with Pakistan 299 and Kazakhstan 300 have entered into force.
According to available information, the Czech Republic does
not plan to do any spillover analysis of its tax treaties to
assess their impacts on developing countries.
In total, the Czech Republic has 39 tax treaties with
developing countries, which is slightly below the average
(42 treaties) among the countries covered by this report.
The average reduction of developing country tax rates
within those treaties – 4 percentage points – is slightly
above average (3.8 percentage points) among the countries
covered by this report. 301 The Czech Republic does not have
any tax treaties that stand out as being ‘very restrictive’. 302
Harmful tax practices
According to a study on aggressive tax planning structures,
the Czech Republic exhibits nine indicators that aggressive tax
planning structures exist in its legislation, as compared with
the EU average of 10.6. 303 The Czech Republic does not have a
patent box and there were no other active indicators found.
Statistics published by the European Commission shows
that the Czech Republic had 34 advance pricing agreements
(or ‘sweetheart deals’) in force at the end of 2014. By the end
of 2015, this number had increased to 47, which makes the
Czech Republic the country with the ninth highest amount
of advance pricing agreements in the EU. 304 The Czech
authorities publish abstracts of advance tax rulings in tax
journals, but there is no public disclosure of the details of
specific rulings. 305
Global solutions
The Czech Ministry of Finance does not support the
establishment of an intergovernmental UN body on tax,
preferring the OECD as the global standard setter. In general,
the Ministry of Foreign affairs shows more understanding
for the global and developmental dimensions of tax justice.
However, they do not consider the agenda important enough
to challenge the Ministry of Finance on the issue. 308
Conclusion
The Czech Government seems to have an ambivalent
position on the issue of transparency. On the one hand,
the Ministry of Finance raises strong concerns about
public country by country reporting, and the Czech law
on beneficial ownership registers is very restrictive in its
access requirements and even raises concerns about being
consistent with the EU’s Anti-Money Laundering Directive.
On the other hand, the government has not yet taken an
official position on the issue of public country by country
reporting, and has just announced support for public
registers of beneficial ownership at EU level.
When it comes to taxation, the Czech Republic is neither
among the worst nor the best. The number of tax treaties
with developing countries, as well as the reduction of
developing country tax rates through those treaties,
are both around average. When it comes to harmful
tax practices and sweetheart deals with multinational
corporations, the Czech Republic has a significant number of
both, but is not among the extremes in the EU.
The official position of the Czech government is that it does
not support the establishment of an intergovernmental UN
tax body, despite the fact that the Ministry of Foreign affairs
has expressed some understanding on this issue.
Although the Czech Minister of Finance Andrej Babiš admits
that aggressive tax avoidance could be harmful for the state
budget, in his blog he positively commented on special tax
regimes in Luxembourg and the Netherlands which in his
opinion helped to attract foreign investment. 306 Just recently
he announced that if he is re-elected he would like to cancel
or at least considerably reduce the tax on dividends. 307
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