Taxes in Czech Republic

Taxes in Czech, Taxation in Czech, Taxes system in Czech

Law No. 586/92 Income Tax (hereinafter the Act) provides for: · Income tax on individuals, · Income tax law. TAX ON INCOME FROM INDIVIDUALS (PIT) Tax Taxpayers Taxable personal income tax of natural persons. From the standpoint of determining tax liability and how to pay the tax, there is an important distinction between residents and non-resident tax. Tax residents are those who are resident or ordinarily reside in the territory of CR (at least 183 days per calendar year for except for study or treatment). Residents have unlimited tax obligation tax means that the tax be achieved by all the income they both in the Czech Republic and abroad (in Poland). Tax non-residents are persons whose defined on the basis of the above criteria can not be considered residents. They are to the limited tax liability ie że subject to income tax, which they obtain from sources in the exclusively territory of the CR. Subject to taxation PIT The subject of income tax from natural persons are: · Income from subsidiary activities (wage) and the benefits of exercise features · Income from business and other activities performed alone gainful · Capital income · Income from the rental, · Other income. Income may be cash, as well as the kind obtained by exchange. In § 4 of the Act lists the income exempted from tax. These include pensions, pensions, compensation, some of the proceeds from the sale of movable and immovable property, lottery winnings, etc. We recommend that you read the detail of the titles of these revenues, there because they meet designated deadlines is a condition of release from taxation. This applies for example, sales of homes and cars. Tax return period The tax return consists of a person whose income tax year in question 15.000 CZK exceeded unless they are exempt from income tax or income taxed at a separate rate (eg dividends, shares in the profits of limited companies, interest rate of bank deposits, etc.) Tax billing period is the calendar year. If the taxpayer does not use the services of tax consultant is obliged to submit tax returns and pay due tax year to 31 March following the tax year. If a settlement on his behalf of tax fraud by a tax advisor, both of these steps must be performed to 30 June the following year. The amounts are not taxable On the basis of § 15 of the Act, the tax base so you can deduct. not subject to taxation of the base. These include interest on loans housing needs according to separate regulations (up to CZK 300,000), donations amounting to a total of at least 2% and at most 10% of the tax base, contributions additional pension of at least 6,000 and a maximum of CZK 12,000 CZK premiums for life insurance up to CZK 12,000, contributions to membership trade unions to the amount of CZK 3000. Tax deductions Tax deductible: in CZK 2009 2010 a) to each taxpayer's 24,840, 24,840, b) the spouse, whose annual revenues do not exceed 68,000 CZK 24,840, 24,840, c) the dependent child taxable 10.680, 11.604, d) the taxpayer incomplete collecting a disability pension 2520, 2520, e) on taxpayers collecting disability benefits pełną 5040, 5040, f) the taxpayer which has seriously impaired the legitimacy of the person 16140, 16140, g) on the taxpayer - 4,020 students. 4020. In addition to the deduction for each taxpayer as the item. and), other deductions from tax mogą be used in 1 / 12 of annual limit for each calendar month in which conditions were necessary for the deduction. The tax rate PIT tax rate in 2009 and 2010 is 15% of the tax base. Taxable PIT tax base is the employee's gross salary, including non-cash proceeds, net of income not subject to taxation and exempt from tax and the amount due plus social security and health paid by the employer. Income of individuals from economic activity The basis for determining the tax base of individuals engaged business or profession, is a tax or accounting records. Taxpayers who do not keep accounting records may take advantage of the lump sum ie that the reference to calculate the taxable amount from the total revenue (Shown as tax records), shall be deducted by the cost of interest rates defined in the Act. In 2010, the following standard cost rates: · 80% of revenues in agricultural production, forestry and water management through the implementation of crafts, · 60% of revenues from business activities with the exception of craft production, · 40% for other types of activities carried out under separate provisions (such as barristers, auditors, tax advisors, architects, doctors, etc.) or income from other gainful activities performed alone (professional athletes, artists, experts, translators, bankruptcy receivers, etc.) Tax records to be settled in a lump sum may lead small operators are not included in the commercial register CR, whose annual turnover does not exceed 25 million CZK. TAX Income Tax (CIT) Taxpayers CIT Payers of income tax from legal persons are those persons that are not physical, so: · Legal persons - traders entered in the commercial register, Management Institutions having legal personality which are not founded or established in order to business. Ww. taxpayers, who in the CR his seat or his leadership, under which is understood as the address of a place where the taxpayer is managed, have a duty Tax liability for both income derived from sources in the CR, as also from the revenues generated abroad. The taxpayers, not having on the territory of the Czech Republic its location, shall tax only on income derived from sources in the territory of the Czech Republic. Subject to taxation CIT The subject of taxation are: revenues from all types of business and management of all components property (eg, revenues from the sale or lease of assets). In For taxpayers who are not established or appointed to conduct the business, are subject to tax revenues from other activities, income advertising, rentals, etc. Taxable CIT The taxable amount is the difference, by which revenue, excluding revenue which are not subject to income tax and exempt from taxation, outweigh the costs (expenses), taking into account the substance and timing belonging to a given billing period. Accountant profit before tax reduced by the revenues that are not subject to tax (eg income received in respect of gifts and bequests), the exempt from income tax (eg income specified in the Act of green), with income taxed at special tax rates, and increased a cost that does not include the deductible (for example, expenditure on representation, the remuneration for members of statutory bodies and other bodies of persons legal expenses for the acquisition of fixed assets and intangible assets, land, etc.). Deductions from taxable income From a fixed tax base can be deducted: a) the tax loss for the period of a maximum of 5 consecutive years following the year in which has been established, b) 100% of expenditure on research and development - focuses on companies with their own advanced research and development and not benefiting from subsidies and support measures public c) a donation of at least CZK 2,000 and a maximum of 5% of the base taxation, less the value of the items a) and b). CIT tax rate 2009 2010 20% 19% Tax deduction According to § 35 of the Act may be deducted from the tax: · CZK 18,000 for each employee with a disability, · CZK 60,000 for each employee with a disability to a higher category disability, · 50% tax on enterprises employing at least 25 employees, where the ratio of people with disabilities more than 50% of workforce Tax returns Legal entities shall submit a tax return by 31 March of the year following the year tax. Legal persons who shall audit accountant, submit a tax return until June 30. The last date fixed for the submission of evidence is also the deadline for payment of tax due. Depreciation of fixed assets Czech Income Tax Act (§ 26 - § 30) makes a distinction between tangible fixed assets intangible. Tangible fixed assets are included in assets whose purchase price exceeds CZK 40,000, and the lifetime is longer than one year. In this group there are mainly: · Buildings, houses, apartments and residential premises, · Buildings, except for operating mining sites, small structures in the plots, fences for the production of forestry and hunting, · Livestock, · Other assets defined in the Act. Fixed assets are classified as intangible assets whose price purchase exceeds CZK 60,000, and the lifetime is longer than one year. In this group includes, among others: · Costs business organization, · Intangible results of research and development, • Included Software, · Rights property, patents, licenses, · Other intangible assets. Law § 26 - § 33 establishes a means of depreciation of fixed assets (or uniform linear, accelerated, or declining balance), sets a uniform annual rate of depreciation and accelerated depreciation rates, as well as specifies the methods and rules depreciation. The basic division of groups of depreciation of fixed assets represent the table below: Group depreciation of tangible fixed assets Group redemption on Period depreciation of tangible fixed assets Sample 1 3 years computers, other technical office equipment, tools 2 Most of the five years of production machines, cars, vans, tractors, buses and cars 3 steam boilers 10 years, trams, trains 20 years 4 towers, masts, buildings with lightweight materials, pipelines, Five thirty years and halls of buildings, industrial, residential facilities, bridges, roads, highways, water works 6 50 years Office buildings, department stores, schools, hotels Due to the prevailing economic crisis, the Czech government under Law No. 216/2009 Sb. revised the system of depreciation of assets purchased period from 01.01.2009 to 30.06.2010 years and belonging to groups 1 and 2 of depreciation. Assets belonging to a group of depreciation can be amortized in period of 12 months in a uniform system of depreciation. Assets of the two groups depreciation can be amortized over 24 months with a uniform depreciation, the depreciation in the first year may reach 60%, 40% in the second the price of the product. In the case of intangible assets to which the taxpayer has the right use for a specified period, the annual depreciation is defined as the ratio of value the initial and the period specified in the contract. In other cases, the Intangible assets are amortized straight-line, according to the table as below. Groups and amortization of intangible assets Type of asset depreciation time in months Minimum period of depreciation in months in the note. improvement Audiovisual Work 18 9 SW 1936 1918 Intangible results of research and development 36 18 Expenditure on the organization of the firm in 1960 - Other measures intangible assets 72 36 Improvement of fixed assets Enhancing the assets determined § 33 of the Law on Income Tax. In this term means the expenditure incurred on: · Completed superstructure, additions and construction, · Repairs (interference of the property, which is aimed at changing its destination or technical parameters), · Modernization of capital assets (equipment and / or enrichment opportunities use of assets) if they exceed the total amount of CZK 40,000 for the asset in the unit a billing period. The value of improvements increases the value initial asset in the case of linear depreciation and the increase net worth in the case of accelerated depreciation. Particular attention should be paid to contrast the cost of repairs, which are included in deductible in the year of incurring the cost of improvements, affect the valuation of the asset, and costs are in the form of tax deductions depreciation. The biggest problem occurs when the nature of the distinction costs associated with the interference of the property for property. Accounting for the cost of repairs requires careful documentation of the collection confirming execution of the repair, rather than improvements. Reclassification of the costs of repairs the improvement in the CR is the subject of frequent additional tax surcharges. Improvements also increases the initial value of intangible assets. For improvements shall be the expenditure incurred on enrichment equipment, raising operating parameters or actions which aim to change the destination component, if these actions after its value exceeds the amount of CZK 40,000. Advances in the CIT Payment of withholding income tax from natural persons and legal persons shall § 38a Income Tax Act. Reserve for the purpose of determining the tax base CIT Law No. 593/92 of the reserves for the purposes of determining the tax base CIT defines how to create reserves. To the statutory provisions that may arise in the conduct of economic reserves are primarily to: · Repairs of fixed assets · Breeding activities, · Odmulanie joints, · Decontamination of land affected by mining. Provision for asset refurbishment A provision for the refurbishment of an asset can be created on the assets subject to depreciation period of 5 years or more, if the taxpayer owns or rents it, and on the basis of the contract is obliged to carry out repairs. Reserve for repairs for individual assets can not be created in only one period. The maximum period is a provision in the case of assets classified as: • 2 Group 3 amortization periods, · 3 groups of six amortization accounting periods • 4 groups of 8 amortization accounting periods · 5 and 6 groups of 10 amortization accounting periods. In the case of movable assets, the reserve for repairs can be created in Depending on their size or volume (eg a truck). The Act also regulates the issues of documentation and settlement deadlines established reserves.

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