Czech Republic: Government’s income tax plan; VAT | KPMG | GLOBAL

Czech Republic: Government’s income tax plan; filing VAT ledger statements

Czech Republic: Government’s income tax plan; VAT

The government has disclosed its plans to amend the tax law, and based on an initial review, it appears none of the changes would radically affect the income tax law.


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Among the changes being considered are amendments to the rules concerning the taxation of “gratuitous supplies;” changes to the rules allowing for the re-classification of revenue from taxable to non-taxable if related to non-deductible expenses; measures providing that payments made by companies from after-tax profit would be treated the same for tax purposes irrespective of their designation or the method of their accounting recognition; imposition of tax at a rate of 5% with respect to close-end mutual funds; and changes to the taxation of finance leases to extend the finance lease rules to the acquisition of intangibles.

Another change would provide that dividend recipients would not be exempt from tax when the paid-out amount is deductible for the entity paying the dividends. The government is also planning to clarify the taxation of advanced payments for dividends, especially concerning subsequent transfers of business shares. 

VAT ledger statements

All taxpayers effecting taxable supplies with the place of supply in the Czech Republic or claiming value added tax (VAT) deductions will have to file VAT ledger statements, monitoring in detail transactions reported in VAT returns. The first period for which VAT ledger statements will have to be filed is January 2016. Legal entities will have to submit their first VAT ledger statements by 25 February 2016.


Read a September 2015 report prepared by the KPMG member firm in the Czech Republic

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