2nd November 2020

Czech digital tax: when and in what form to expect it

In this article, we among other things already discussed the proposal to reduce the tax rate from 7% to 5 %. After a deputy of one of the governing parties submitted this amending proposal, this change already seemed like a done deal in June.  But even after a few months, the official proposal is still a rate of 7%. To reduce the rate by 2%, deputies would have to pass this amending proposal during the third reading. On the other hand, it must be acknowledged that during the summer, deputies did not have time to discuss a digital tax thanks to COVID-19 and the resulting limited operation of the chamber. The related second-reading discussions did not begin until the second half of September and were subsequently terminated due to a lack of time. 

The effective date of this act itself is another question that cannot be answered at this time. The bill in its current version should become effective on the 15th day of its promulgation in the Collection of Laws and this was supposed to be mid-2020. One of the amending proposals filed by deputies of the governing parties suggests postponing effectiveness to 1 January 2021. To achieve this goal, the debate on the bill and related amending proposals in the chamber of deputies will have to conclude in the upcoming weeks.

Diana Marková dmarkova@kpmg.cz+420 222 124 306

Matěj Kolář mkolar@kpmg.cz+420 222 123 747

Members of the American Chamber of Commerce in the Czech Republic