Czech News - Dec 95 - New Laws and Amendments in Draft

Laws governing the capital market

Amendments to the laws governing the capital market, in particular to the Securities Act, Security Exchange Act, and Commercial Code, are now in preparation. Apart from other things, the amendments will increase protection of minority shareholders, specify procedures of increase and decrease in equity capital, state conditions of purchase of own shares. The amendments are expected to take effect on July 1, 1996.

Act on foodstuffs and tobacco

The Government approved a proposed law on foodstuffs and tobacco that will set rules for production, storing, distributing and selling the affected products. Implementation of the law is planned for July 1, 1996.

Act on asset appraisals

The cabinet passed a draft law on asset appraisals that is intended to prevent tax evasion and to protect taxpayers against unduly high assessments due to faulty appraisals. The proposed act concerns appraisals of movable assets, real estate, intangible rights, and securities for tax purposes.

Preparation of the amendment of the Accounting Act

The amendment of the Accounting Act is now in preparation. It should come into effect in 1997. The amendment will conform Czech legislation to EU requirements. The concept of an accounting period will change, and it is reported that the use of non-calendar year accounting periods will be permitted. An alternative form of profit & loss statement is planned to be implemented. An Information Centre is proposed to be established to store obligatory financial statements and annual reports.

The information in this newsletter is correct to the best of our knowledge and belief at the time of going to press. Specific advice should be sought, however, before investment and other decisions are made.

Please address any questions to:

Tax and legal advisory services:
Paul Antrobus/Jan Kaucky
Audit and accounting advisory services:
Magdalena Soueek/Ladislav Langr
Business advisory services:
John Weste
Arthur Andersen Prague, tel: +42 2 2440 1300, or enter text search 'Arthur Andersen' and 'Business Monitor'.