In February 2011, the Ministry for Regional Development released a draft Amendment to the Public Procurement Act and invited public to comment. The Government announced in April that reading of the bill in the Chamber of Deputies in June will be combined with the vote of confidence. The bill is now in the second reading in the Chamber of Deputies and will be discussed at the session of the Chamber of Deputies starting on October 25. The primary aim of the bill is to reduce corruption risks in public procurement. Newly introduced key principles and measures aim at greater transparency of the tendering process, extended scope of procurements that have to be processed according to the Public Procurement Act (from 2014, the Act will apply to all procurements over Kc1,000,000), and greater efficiency of the tendering process. Click here for details.
The draft act on JIM/the Single Collection Point and amendments to 66 related laws, including the Income Tax Act, Acts on Health, Sickness and Pension Insurance, for example, will be debated in the second reading at the session of the Chamber of Deputies on October 25. The bill is one of the pillars of the tax reform announced in the Government Proclamation in August 2010. The stated intent of the tax reform is to increase effectiveness of public finance and increase the state budget revenues by 1. reducing direct taxation (taxation of labor) and increasing indirect taxation (VAT and excise tax); i.e. use VAT tax revenues to finance the planned pension reform, and 2. making the Czech tax system more transparent and user-friendly (this means cutting the number of tax exemptions, for example). Click here for details.
The Chamber of Deputies will discuss the Amedment to the VAT Act at its session starting on October 25. The Ministry plans an increase in VAT tax rate - the lower rate from 10% to 14% as of January 1, 2012 - and a unification of VAT rates at 17,5% as of January 1, 2013. Click here for details.
The draft Act on Criminal Liability of Corporations (click here, amendments to related acts here) will have its third reading at the session of the Chamber of Deputies starting on October 25. The Czech Republic is the last EU member state to adopt this kind of regulation. The bill includes a list of around 80 violations of law corporations can be sanctioned for, however, the list does not include economic criminal activity such as ‘tunneling’, breaches of law in the area of public procurement, horizontal cartel agreements, cross-border trade with military material and state-controlled technologies. There is also no provision on Leniency Program.
The issue of Concurrence of Employment and Statutory Body Membership is dealt with within the Amendment to the Commercial Code. The Chamber of Deputies will discuss the bill in the third reading at the session starting on October 25. Members of Boards of Directors or Supervisory Boards, besides having a mandate contract, could be officially allowed to have also an employment contract. The Ministry of Justice has proposed an amendment to the Commercial Code that would explicitly allow for the duality. For detials click here. Amendments to respective acts were also proposed by the Ministry of Labor and Social Affairs to make employees and statutory body members equal in terms of contributing to the pension and sickness insurance systems. The amendment to the Act on Sicness Insurance will be debated by the Chamber at its session on October 25. Click here for details.
The brand new Civil Code draft act will have its second and third readings at the Chamber session starting on October 25. The aim of the new Civil Code is to unify a rather fragmented civil law (new law will replace current Civil Code, part of the Commercial Code, part of the Labor Code) and make it more user-friendly. Major changes are expected in legal terminology; new legal instruments will be introduced; the freedom of contract is stressed. The adoption of a new Civil Code means new amendments to a wide range of acts, including Labor Code or tax acts. Click here for details.
MPs will discuss a brand new Act on Corporations at the Chamber session starting on October 25. The new Act on Corporations should replace the current regulation of companies / corporations under the Czech Commercial Code and better define the process of their establishment and operations. No major changes of regulation are expected, although there are exceptions: corporate governance (including liability / responsibility of statutory bodies), regulation of holdings and capital companies (limited liability companies and joint stock companies). Click here for details.
At its session starting on October 25, 2011, the Chamber of Deputies will vote on the Amendment to the Labor Code. MPs greenlighted the bill beginning of September, but the Senate, the Upper Chamber of the Parlament, rejected the draft amendment at its session on October 7 and returned the bill to the Chamber of Deputies. The changes proposed in the Labor Code mirror negative practical experience of users with the 2007 amended Code. The bill increases to a certain degree the flexibility of the Czech labor market and reduces administrative burden (by re-introducing institutes such as temporary secondment, allowing courts (in specific cases) to decide about the compensation for an employee for an invalid termination of employment).Tthe bill newly introduces 6-month trial period for top managers, the amount of severance pay would correlate with the duration of employment, hours worked overtime would be included in the contracted salary. For more click here.
The Chamber of Deputies greenlighted the Amendment to the Act on Health Care Insurance after the draft amendment was rejected by the Senate in September. The stated intent of the amendment is to reduce costs of pharmaceuticals by adjusting reimbursement and pricing policy. The Ministry of Health claimed this was necessary because pharmaceutical costs in the Czech Republic are higher than elsewhere in Europe. Click here for more.
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