The Ministry of Foreign Affairs announced in April conclusion of the following Trade agreements:
- with Estonia under No. 53/1998 Coll.
- with Egypt under No. 55/1998 Coll.
- with Israel under No. 86/1998 Coll.
- with Malaysia under No. 107/1998
Amendment to the Road Tax Act
Act No. 61/1998 amended the Road tax act. The amendment abolished the exemption in the case of communications vehicles and vehicles used for transportation of goods from the place of their storage to a place where they are reloaded onto railway, ship or air transportation, and expanded the definition of a taxpayer. The amendment is effective from 30 March 1998.
Double Tax Treaty with Malaysia
The Treaty was published under No. 71/1998 Coll. Pursuant to Article 5 of the Treaty, a permanent establishment is created after 12 months in the case of a construction site.
The Treaty defines maximum rates of withholding taxes as follows:
- Dividends: 10%; except that dividends paid to a Czech resident by a company that resides in Malaysia are exempt from Malaysian tax, if the Czech resident is beneficial owner of the dividends;
- Interest: 12%if the recipient is beneficial owner of the interest, except that interest paid by a resident of Malaysia to a beneficial owner of interest who is resident in the Czech Republic is exempt from Malaysian tax, if the loan qualifies according to the Malaysian Income Tax Act; also interest paid on loans granted by a government body (as defined in the Treaty) is exempt from tax in the state where the interest arises.
- Royalties 12%, if the recipient is the beneficial owner of the royalties.
- Technical services: 10% if the recipient is the beneficial owner of fees of a technical, management or advisory character.
The treaty is effective from 9 March 1998. Its provisions apply for Czech withholding taxes from 1 January 1998 and for other Czech taxes from 1 January 1999.
Construction Act
The Amendment of Construction Act No. 50/1976 Coll. was published under No. 83/1998 Coll. We commented on this expected significant amendment in Czech News published in February and March 1998.
Amendment to the Public Procurement Act
This amendment was published under No. 93/1998 Coll. In particular, the amendment introduces stricter requirements on applicants mainly in respect of their qualifications.
Investment Protection Treaty with Venezuela
The announcement of the Ministry of Foreign Affairs on Investment protection treaty between the Czech Republic and Venezuela was published under No. 99/1998 Coll.
Financial statements of entrepreneurs - closing of accounting books
The Ministry of Finance announced the issue of a measurement that changes the content of financial statements for entrepreneurs in Part 35 Coll.
Ministry of Finance instructions
The following instruction was published in Financni zpravodaj No 3/1998.
Decree D - 172 on use of foreign exchange rates for VAT purposes
Decree D-172, which replaces decree D - 141, stipulates that the price for a taxable supply agreed in a foreign currency should be converted into Czech currency according to the ยง 24) 2) a) of the Czech Accounting Act and according to the provision No. 61/1995 published in the Financni zpravodaj 10/1995.
Exchange rates declared by the Czech National Bank effective on the day when the duty to apply output tax arose should be used. The fixed exchange rate set down by the taxpayer according to his accounting procedures and valid for him on the day of the taxable supply can be also used.
Tax deadlines
Real Estate Tax
The first real estate tax instalment is payable as of June 1, 1998. Should the annual real estate tax not exceed Kc 1,000, it is also due, in a lump sum on June 1, 1998. If the amount due is higher, the real estate tax may still be paid in a lump sum by this date.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information on the above, please contact Mr Richard Fletcher by telephone on +420 2 2440 1300 or E-mail directly to Click Contact Link