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Results: 4 Answers
Corporate Tax
2.
Special regimes
2.1
What special regimes exist (eg, for fund entities, enterprise zones, free trade zones, investment in particular sectors such as oil and gas or other natural resources, shipping, insurance, securitisation, real estate or intellectual property)?
 
Czech Republic
Expenses incurred by Czech taxpayers for research and development (R&D) purposes can be used as general costs (unless swapped to equity (capitalised)), and can also be used to decrease the tax base. This means that if all statutory conditions are met, 200% of R&D expenses can decrease the taxpayer’s accounting profits in a given tax period. However, the taxpayer must prepare an R&D project and comply with certain requirements set out in the Income Tax Act in order to use such expenses to decrease its tax base.

Further, Czech tax law supports pension funds with a corporate income tax rate of 0% and qualified investment funds with a special income tax rate of 5%.

Under government investment incentives focused on high-tech manufacturing and service industries, substantial tax relief is available for qualified investments in the form of a tax discount.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
2.2
Is relief available for corporate reorganisations or intra-group transfers of companies and other assets? Please include details of any participation regime.
 
Czech Republic
If a corporate reorganisation is carried out for genuine economic reasons, the reorganisation is tax neutral. Another underlying condition is that the successor company must perform business activities in the 12 months preceding the reorganisation. However, this condition can be rebutted by evidence of genuine economic reasons.

As to the shareholding regime, dividends distributed by both foreign and local subsidiaries and capital gains on the sale of shareholdings may be exempt from tax if some conditions laid down in the Income Tax Act are satisfied. Among other things, the parent company must hold a minimum 10% share of the registered capital of the subsidiary for at least 12 months, and both the parent and the subsidiary must have a legal form stipulated in the EU Parent-Subsidiary Directive.

Similar rules apply to shareholdings of local companies in foreign subsidiaries located in tax treaty countries. In addition, some further conditions must be met - in particular, the income of the foreign subsidiary must be subject to tax at a rate of at least 12% and its legal form must be comparable to the key legal features of a limited liability company, a joint stock company or a cooperative under Czech law.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
2.3
Can a taxpayer elect for alternative taxation regimes (eg, different ways to calculate the taxable base, such as revenue-based versus profits based or cash basis versus accounts basis)?
 
Czech Republic
Corporate income taxpayers cannot choose alternative taxation regimes, except for deemed service permanent establishments established before 1 January 2014, which may continue calculating their tax base on a cash basis; and new permanent establishments, which in certain circumstances may not be required to keep accounts on an accrual basis.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
2.4
What are the rules for taxing corporates with different functional or reporting currency from that of the jurisdiction in which they are resident?
 
Czech Republic
Corporate income taxpayers are generally required to keep their accounting records for statutory purposes in accordance with Czech generally accepted accounting principles and in Czech koruna. Any conversion to a different functional currency is an internal matter of the corporation.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
2.5
How are intangibles taxed?
 
Czech Republic
The Income Tax Act stipulates special rules for the depreciation of intangible assets acquired for trading purposes. The tax depreciation is charged evenly on monthly basis. The depreciation period either is set for the term of the licence agreement or, if the use of the property is not limited in time, varies from 18 to 72 months depending on the type of intangible. Goodwill acquired for a fee is depreciated evenly over 180 months.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
2.6
Are corporate-level deductions available for contributions to pensions?
 
Czech Republic
Corporate income taxpayers may deduct contributions to pensions which are defined in their internal guidelines, labour contracts or collective agreements with trade unions to qualified private pension funds provided by pension institutions which are registered and regulated in a member state of the European Union or the European Economic Area, and which satisfy certain statutory requirements laid down in the Income Tax Act. The limitation of these deductions results, by definition, in the limitation of exempt income in the form of employers’ contribution for the employees, which is CZK 50,000 per year in combination with life insurance contributions, if any.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
2.7
Are taxpayers from different sectors (eg, banking) subject to different or additional taxes or surtaxes?
 
Czech Republic
There are no sector taxes or surtaxes in the Czech Republic.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
2.8
Are there other surtaxes (eg, solidarity surtax, education tax, corporate net wealth tax, remittance tax)?
 
Czech Republic
There is no solidarity surtax, education tax, corporate net wealth tax, remittance tax or similar tax surcharges in the Czech Republic.

For more information about this answer please contact: Helena Navratilova from Kocian Solc Balastik
2.9
Are there any deemed deductions against corporate tax for equity?
 
Czech Republic
The Czech Republic does not provide for any deemed deductions for equity.

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