Vyvoj sazby dane z prijmu pravnickych osob v Ceske republice

Development of the corporate income tax rate in the Czech Republic

In today's alert we would like to take you through the historical development of the corporate income tax rate since 1993 (i.e., after the effective date of Act No. 586/1992 Coll. on Income Taxes). 

The Czech Republic is one of the countries where the corporate income tax rate has gradually decreased. In 1993, the basic rate was 45% and in the following years (see table below) it decreased to the current 19%. Since 2010, the basic corporate tax rate has remained unchanged.

It may be of some interest that the reduction of income tax rates for the years 2004 to 2006 was already determined by an amendment to the Income Taxes Act in 2003 (Act No 438/2003 Coll. amending the Income Taxes Act). This fact has allowed some taxpayers to optimise their corporate income tax by accelerating the deduction of certain costs (e.g., tax depreciation) in periods with a higher rate.

There are currently proposals to introduce a so-called sectoral (or "war") tax for certain taxpayers. Conversely, if there is a future increase in the corporate tax rate, consideration may be given to deferring the deduction of certain costs. Of course, when deferring the deduction of costs, the impact on the overall cash flow of the company should also be considered.

In conclusion, we would like to stress that the above brief commentary cannot replace a detailed tax assessment of a particular tax situation. We will be happy to help you with these and other tax aspects.

If you have any questions, please contact the authors of this article or the EY tax team with whom you regularly work.

Authors:

Gabriela Dias

Ladislava Zamazalová