The Czech Republic decreased the time needed to comply with tax regulations
24.11.2009Company: PricewaterhouseCoopers Česká republika, s.r.o.
While it might be difficult for governments to decrease tax rates in times of economic slowdown, reducing the administrative burden can always be a win-win measure, delivering benefits to both government and business ...
“Decreasing the time needed to comply with the tax requirements is certainly very positive news,” commented Paul Stewart, Lead Tax Partner, PricewaterhouseCoopers Czech Republic. “This is largely due to the introduction of electronic filing for VAT in January 2008.”
“It is very important to realise that corporate income taxes are only a part of the total tax burden for businesses – and, as the table below suggests, often not the major tax expense for businesses. For example labour taxes still comprise the largest part of both the total tax rate as well as the time needed to comply,” said Paul Stewart.
Peter Chrenko, Deputy Minister of Finance in the Czech Republic, said: “We appreciate the Paying Taxes benchmarking analysis and it is one source of reference we use to obtain additional insight into the tax competitiveness of the Czech Republic and the various approaches towards tax reform adopted around the world. The Ministry is aware that one of the key factors that increases the time needed to comply with Czech tax requirements are payments related to employees, specifically social security and health insurance. We are preparing two initiatives that should lead to a significant improvement in this area, namely a single-revenue authority that will administer all taxes, customs and social and health insurance and one base to be used for the calculation of income taxes and labour-related taxes.”
“While it might be difficult for governments to decrease tax rates in times of economic slowdown, reducing the administrative burden can always be a win-win measure, delivering benefits to both government and business,” commented Lenka Mrázová, Tax Director at PricewaterhouseCoopers Czech Republic.
