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Results: 4 Answers
Corporate Tax
1.
Basic framework
1.1
Is there a single tax regime or is the regime multi-level (eg, federal, state, city)?
 
Czech Republic
The Czech Republic has a single tax regime, as all taxes are levied at country level.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
1.2
What taxes (and rates) apply to corporate entities which are tax resident in your jurisdiction?
 
Czech Republic
The corporate income tax rate is 19%. Income of qualified investment funds is subject to a 5% tax rate and income of pension funds is subject to a 0% tax rate. Foreign source shares in profits - including dividends, settlement shares, shares in liquidation proceeds and similar types of income - are included in a separate tax base, which is subject to a 15% tax rate. Tax withheld in accordance with the tax rates stipulated in applicable income tax treaties may be credited to the 15% Czech tax liability.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
1.3
Is taxation based on revenue, profits, specific trade income, deemed profits or some other tax base?
 
Czech Republic
Taxable profits are calculated based on the accounting results. Every corporate entity seated or doing business in the Czech Republic must keep accounting books according to Czech accounting standards. However, if the entity issues securities which are accepted for trading on a European regulated market, it may keep accounting books based on International Financial Reporting Standards. In the latter case, however, the corporation must adjust its accounting results to Czech accounting standards to establish the starting point for the corporate income tax base calculation.

Accounting results which are computed on an accrual basis are further adjusted for tax purposes pursuant to the Income Tax Act. The most significant adjustments include, without limitation:

  • interest and other costs relating to loans from related parties, calculated on that amount of the principal which exceeds four times the equity;
  • representation costs;
  • some reserves and provisions;
  • unpaid contractual interest and penalties;
  • unpaid real estate tax and real estate transfer tax;
  • unpaid health insurance and social security contributions due from an employer to employees; and
  • shortages and damages.
For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
1.4
Is there a different treatment based on the nature of the taxable income (eg, gains on assets as opposed to trading income or dividend income)?
 
Czech Republic
The types of income that are subject to a specific taxation regime are limited, since most types are included within the taxpayer’s general tax base. Generally, only foreign source shares in profits - including dividends, settlement shares, shares in liquidation proceeds and similar types of income - are included in a separate tax base and subject to a 15% tax rate.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
1.5
Is the regime a worldwide or territorial regime, or a mixture?
 
Czech Republic
The Czech Republic uses a worldwide tax regime. This means that income (with the exception of shares in profits and similar types of income) sourced outside the Czech Republic is taxed in the same way as Czech Republic sourced income, unless a respective tax treaty limits the right of the Czech Republic to tax such income.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
1.6
Can losses be utilised and/or carried forward for tax purposes, and must these all be intra-jurisdiction (ie, foreign losses cannot be utilised domestically and vice versa)?
 
Czech Republic
Taxpayers may use tax losses to offset future profits disclosed in the five tax periods immediately following that for which the tax loss was incurred, regardless of whether they were triggered in or outside the Czech Republic. However, certain restrictions apply if the taxpayer which incurred the tax loss is involved in a company reorganisation, or if a substantial change takes place in the composition of the parties directly participating in equity or controlling the taxpayer.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
1.7
Is there a concept of beneficial ownership of taxable income or is it only the named or legal owner of the income that is taxed?
 
Czech Republic
The beneficial ownership concept is used for taxation in the Czech Republic.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
1.8
Do the rates change depending on the income or balance-sheet size of the taxpayer?
 
Czech Republic
The corporate income tax rate is a flat rate of 19%, which does not depend on the size or other characteristics of the taxpayer.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
1.9
Are entities other than companies subject to corporate taxes (eg, partnerships or trusts)?
 
Czech Republic
In general, not only companies, but all legal entities - such as private foundations, general and limited partnerships and non-profit organisations - are subject to corporate income tax. Some other entities are also considered to be payers of corporate income tax, such as trusts established in accordance with the Czech Civil Code, unit funds and société d'investissement à capital fixe funds.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik