AmCham Intel: AmCham members discussed the current and future tax policy with the Ministry of Finance

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16th October 2023

The Ministry expects that changes introduced in the recent tax law amendment, together with the planned cuts on subsidies spendings, should be sufficient to keep the state budget deficit at an acceptable level (below Maastricht criteria).

Within the discussion about budgetary allocation of different taxes to state budget and municipalities, it was mentioned that the current system of allocation of taxes gives municipalities almost no motivation to support new investments in their neighborhood, since the municipalities have no income from such new investments.

The Ministry plans to make further steps towards digitization of the tax area. First steps should be taken in the area of Real Estate Tax. The digital tax administration system will offer taxpayers a pre-filled RET return in DIS+ platform. Another step should be Personal Income Tax return with pre-filled data.

On January 1, 2025 a new Accounting Act should enter into force. The new Accounting Act will provide more "freedom" to business; it will be rather principle-based (true and fair view) than describe each accounting rule to very detail. The Ministry is now also working on an amendment of the Income Tax Act reacting on the accounting changes.

The discussion then ranged from VAT to transfer pricing to Pillar 2 minimum effective tax rate of 15%, including the impact of the Pillar 2 rules on the R&D deduction, among others.

AmCham advocates for a transparent and predictable tax system enabling and driving innovative economy in the Czech Republic. Thank you to David Borkovec, Partner in Tax and Legal Services at PwC for chairing the session and driving the discussion.