Czech News - April 1998 - Ministry of Finance instructions

The following instructions were published in Cenovy vestnik No 4 and 5/1998.

Decree D - 166

Decree D-166, which replaces decree D - 105, deals with the applications of VAT to restaurant services. It defines terms used in the restaurant sector and public catering and their classification into SKP categories and consequently application of standard or reduced VAT rate.

In particular, the decree deals with application of VAT in restaurants and other public catering, services of company's canteen and delivery of meals, catering in schools, kindergartens and hospitals.

Appendices to this decree describe options for VAT treatment of company canteen catering provided by a third party or by the company itself.

Decree D - 168

Decree D-168 replaces decree D-57 and D-58 and it deals with the application of VAT to international transportation of passengers, goods, monies and related services. It defines the terms used in this area, determines subjects and describes issuing of tax documents.

Decree D - 179

This decree provides further information subsequent to decree D-132 in respect of the technical appreciation of buildings. Non-domestic cooling and ventilation equipment should not be treated as the part of the building. If the conditions listed in the Decree are met, such equipment should be considered as separate asset and depreciated in group 3 over 15 years.

Decree D - 180

Decree D-180 provides an explanation of the new wording of §6 (9) ch) of the Income Tax Act regarding the taxpayer's residency on the territory of the Czech Republic. It determines the days that should be counted toward the 183 days time test - holidays, vacations, business trips. This calculation method, however, should only be used for residents of non-treaty countries.

The decree also sets out the method of taxation of sportsmen, artists and similar activities that are subject to 25% special tax rate, regardless if the period of the activity and whether this activity is performed as dependent or independent.

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.