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The Czech Republican government has recently accepted the first reading of a Bill initiating change to tax laws especially regarding private law recodification. The bill if passed by both houses of the parliament and signed by the president, may become applicable from January 1, 2014. Key Highlights: Corporate income tax provisions: * Exemption for dividends and other profit received by a resident company in the country from other resident company and also companies from EU Member States, Norway, Iceland and Switzerland. * Similarly, exemptions would also be given to dividends and other profit distributions earned by a company resident in EU Member States, Norway, Iceland and Switzerland from companies resident in the country. * Encouragement for research and development (R&D) activities, * Companies can claim an extra 110% of costs if they meet the norms of R&D activities; * In addition, third parties providing R&D services may also be eligible to get this benefit. * A deduction of up to 10% of the tax base (presently, 5% generally) for donations given to educational and charitable institutes. This provision extends to: * Organization in other EU Member States, Iceland and Norway, and * Also for disabled individuals and individuals who maintain medical and educational facilities as per the law. * Process of bad-debt provisions has been simplified. Individual income tax provisions: * Exemption for dividends and other profit received by resident individuals in the country from a resident company and also companies from EU Member States, Norway, Iceland and Switzerland. * Similarly, the exemption would also be given to dividends and other profit distributions earned by an individual resident in EU Member States, Norway, Iceland and Switzerland from companies’ resident in the country. * The non-resident individual may become entitled to deductions and tax credits in cases where they fulfill the following: * A Non-resident individual is resident in other EU Member States, Norway and Iceland; and * The Czech Republic is a source of 90% of their global earnings. Teaming up with a trusted professional can ease difficulties that arise in an international expansion. A professional partner can offer HR Services, Global HR Consulting Services or any other assistance that you may need while doing business overseas. Read more on - Benefits of expanding business overseas
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