Österreichische Volksbanken-Aktiengesellschaft ... - Volksbank AG

Furthermore, the Interest-Savings Directive provides that if a higher tax was withheld abroad on
Czech taxpayer’s interest income than that laid down in the relevant double tax treaty, his tax
liability may be reduced by such foreign tax provided that it was withheld in accordance with
the Interest-Savings Directive. Should the total tax liability be lower than the tax withheld in
accordance with the Interest-Savings Directive, an overpayment should arise to the tax payer.
Czech (corporate) income tax regarding warrants
Based on Czech legislation the warranties cannot be treated as securities, but rather as derivates.
Tax Residents
Sale of warrants hold by individuals subject to unlimited income tax liability in the Czech Republic
is subject to income tax pursuant to sec. 10 of the Czech Income Tax Act at a marginal
rate of up to 32 per cent. on the difference between the sales price and the acquisition cost of the
warrants.
All income realized from the warrants hold by individuals subject to unlimited income tax liability
in the Czech Republic as a business asset is subject to income tax at a marginal income
tax rate of up to 32 per cent. pursuant to sec. 7 of the Czech Income Tax Act (just difference
between the sales price and acquisition costs is subject to tax in case of sale).
All income realized from the warrants hold by corporations subject to unlimited corporate income
tax liability in the Czech Republic is subject to corporate income tax (i.e. the difference
between the sales price and the acquisition cost of the warrant) at a rate of 24 per cent. A different
regime may be applied to certain corporate entities (e.g. pension funds).
Non Residents
Gains realized in respect of warrants might be subject to the Czech taxation with specification
mentioned in the relevant double tax treaty if the purchaser is a Czech tax resident or a permanent
establishment of a foreign company constituted in the Czech Republic.
If double tax treaty was not concluded with the relevant state or if Czech tax may be applied
under the relevant double tax treaty, capital gain should be included in general tax base of the
non resident (subject to marginal tax rate of 32 per cent. in the individual´s case and 24 per cent.
in the company´s case) and tax return shall be filed. Only if the seller is not tax resident in EU
or EEA, 1 per cent. securing tax should be withheld from the selling price by the Czech purchaser
and the securing tax might be regarded as final taxation.
Furthermore, if the warrants form part of the business property of a permanent establishment of
the holder of a warrant in the Czech Republic, the income is also subject to the Czech taxation.
If the non-resident of the Czech Republic is subject to Czech taxation with income from the
warrant, a tax regime similar to that explained above at "Tax Residents" applies.
Czech inheritance tax
Pursuant to the Czech Gift, Inheritance and Real Estate Transfer Tax Act, the succession of
Notes is subject to inheritance tax provided that the deceased was a Czech citizen with permanent
residence in the Czech Republic. Inheritance tax is payable by the heir of deceased person.
Please note that if the deceased was not a Czech citizen or had not permanent residence in the
Czech Republic, the succession of Note is not subject to inheritance tax provided that it was not
located in the Czech Republic.
There are three categories of taxpayer for both inheritance tax, namely:
1. direct relatives and spouses of the deceased/donor
2. other relatives
343