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  • Service: Tax, International Corporate Tax, Global Indirect Tax, International Executive Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 6/12/2012

Czech Republic - Austerity measures include increased income tax, VAT rates 

June 12:  Changes proposed as part of the austerity package announced in April 2012 have been sent to Parliament and are now slated for discussion before the Chamber of Deputies.  The government is seeking additional sources of income for the state budget, and proposes:
  • To increase individual (personal) income taxes
  • To increase the value added tax (VAT) rates to 21% and 15%
  • To increase the real estate transfer tax rate to 4%
  • To expand application of the real estate transfer tax to transfers of shares (interest) in corporations owning real estate
  • To introduce a new payment under the pension system—a 5% “pension savings premium”

These measures generally would be effective in 2013.


From a taxpayer point of view, the changes could mean certain complications—rather than simplifications—of tax laws as had been promised. Some changes are only proposed for a limited period from 2013 to 2015; some have no such time limit.


Recall that in November 2011, several laws introducing comprehensive changes in the tax area were enacted in connection with the so-called “single collection point.” These laws were to have an effective date of 2015, but some of those measures are now incompatible with the government’s present proposals. This could mean that further changes will be required to laws already passed.


To read a June 2012 report [PDF 310 KB] prepared by the KPMG member firm in the Czech Republic: Financial Update (June 2012).


The June 2012 report also describes in Slovakia, a new special tax to be levied on “regulated entities” (i.e., corporate entities that generate at least 50% of their revenues from activities in certain sectors, including energy, insurance and re-insurance, postal services, pharmaceuticals, and transport among others).




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