Global

Details

  • Service: Tax, International Corporate Tax, Global Indirect Tax, International Executive Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 7/19/2012

Czech Republic - Proposed changes for collective investment funds 

July 19:  A proposal from the Ministry of Finance would amend Czech law with respect to collective investment funds.

In general, the proposal would transpose relevant EU directives concerning collective investments—including the Directive on Undertakings for Collective Investments in Transferable Securities (UCITS IV)—into Czech law.


It is anticipated that an investment company bill could be submitted by the government in August 2012 and, if enacted, would be effective 1 July 2013.


Among the proposed changes are measures concerning:


  • Qualified investor funds (QFIs), which would no longer be classified under collective investment funds but would be subject to a €100 million limitation on assets
  • A distinction between the activity of an administrative agent and that of a manager

Related tax changes

The new law would also include corresponding amendments to the income tax law, and proposes to restrict the range of entities applying the 5% corporate income tax rate.


The 5% rate currently is applied by all unit trusts and mutual / investment funds. However, in the future, it would only be applied by collective investment funds whose shares or units are accepted for trading by an EU-regulated market, and by open-ended funds, sub-funds, and joint-stock companies with variable capital and certain foreign funds or sub-funds. Other funds would be subject to the standard corporate income tax rate of 19%.


Read a July 2012 report [PDF 293 KB] prepared by the KPMG member firm in the Czech Republic: Financial Update (July 2012)


Other developments in the Czech Republic discussed in the July 2012 report concern:


  • Interpretations regarding value added tax (VAT) changes in healthcare services
  • A new ruling on the difference between repairs and technical improvements
  • Tax implications of the temporary assignment of an employee to another employer



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