The Czech Republic’s system of company tax is one of the most complicated in the EU, claims a study made in collaboration by the consultancy BDO and two German universities. The Czech Republic ranked fourth from bottom among EU states and its tax system was considered below average in the world-wide ranking.
Shares of Czech banks were down on Monday a day after Prime Minister Andrej
Babiš (ANO) unveiled a plan to ask banks to pay 10 to 20 percent of their
dividends into a new state development fund.
Mr Babiš said in a televised interview on Sunday that his centre-right government is seeking new revenue streams against a backdrop of slowing economic growth. He would not say whether the payments should be voluntary or mandatory.
He rejected the idea of a new bank tax proposed by his junior coalition partner, the Social Democrats, after having earlier said it was an option. The Social Democrats would see the tax progress from 0.05 percent to 0.3 percent, raising some 14 billion crowns.
President Miloš Zeman has signed legislation enabling the state to tax
church restitutions, according to an official press release from Prague
Castle. Communist deputies say the highly controversial law, which had to
go through a second vote in the Chamber of Deputies in late April after it
was vetoed in the upper-house, could retain CZK 380 million from the annual
CZK 2 billion pay-outs the state has pledged to undertake until 2030.
Opposition parties including the Mayors and Independents and the Christian Democrats are planning to issue a complaint to the Constitutional Court, which they hope will invalidate the legislation.
The Bank Board of the Czech National Bank raised its basic interest rate to
2 percent, an increase of 0.25 percent, the Czech News Agency reports. It
is the first rise since November 2018 and interest rates are now at their
highest in the past 10 years.
Analysts told the Czech News Agency the increase is mainly due to developments in the country’s economy, with inflation rates rising above predictions in the first quarter of 2019 and the exchange rate for the Czech crown weaker than the bank predicted in February.
The bank has also decided to go ahead with 0.25 percent raises in the Lombard rate, which deals with short-term liquidity loans to commercial banks and the discount rate.
The Czech government wants to impose a seven-percent tax on large digital
companies, such as Facebook and Google. Under the plan, agreed by the
cabinet on Tuesday, the multinational companies would have to pay taxes in
the place they make earnings.
The cabinet is hoping the move could lead to increased revenues of around five billion crowns a year. The Ministry of Finance is due to draft a digital tax bill by the end of May.
A controversial proposal to tax money paid to religious groups in compensation for property seized under Communism is a step closer to becoming law. In their first session since the Easter holiday, MPs on Tuesday overrode a veto by the Senate to tax the restitution income of 16 Czech churches and a Jewish federation.
The Czech government aims to obtain much more revenue in taxation from the likes of Google and Facebook, Hospodářské noviny reported on Thursday. Under a planned new digital tax scheme, the huge multinationals would be forced to pay taxes in the place they make earnings, in this case the Czech Republic, the business daily said.