Tax Policy



Basic Principles of Taxation
•Efficiency (no distortion)
•Administrative simplicity (low cost)
•Flexibility (adaptation)
•Political responsibility (transparentess)
•Fairness
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Tax system in the CR from 1993
•Direct taxes
•Personal income tax (PIT)
•Corporate income tax (CIT)
•Property (real estate)
•    tax
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•Social security contributions (SSC)
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•Indirect Taxes
•Value added tax (VAT)
•Excise duty (ED)
•Ecological Taxation (electricity, natural gas and solid fuel)
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•Import duties

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Changes after 1993
•Fast reform = simple reform
•World is developing
•Need of harmonization and koordination (especially at EU level)
•Changing of governments (and fiscal policies)
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Private Income Tax (PIT)
•Many amendments
•Decreasing of tax rates
–15, 20, 25, 32, 40, 47%
•Since 2010: 1 rate – 15%
–(but since 2013: „solidarity“ tax: +7% for income over 100 000CZK/month)
•Erosion of the tax base (charity, blood donation etc…)

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Corporate Income Tax (CIT)
•Decreasing tax rates
•Coordination with EU, OECD
•Since 2010: taxe rate 19%
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Value Added Tax (VAT)
•Main changes were done during 2004 – EU entry (harmonization) •Moving commodities from lower rate
to standard
•Decreasing of the registration threshold
•Changes in the tax rates

Development of VAT rates
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Period
Standard rate
Reduced rate
Second reduced rate
1. 1. 1993 – 31. 12. 1994
23 %
5 %
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1. 1. 1995 – 30. 4. 2004
22 %
5 %
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1. 5. 2004 – 31. 12. 2007
19 %
5 %
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1. 1. 2008 – 31. 12. 2009
19 %
9 %
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1. 1. 2010 – 31. 12. 2011
20 %
10 %
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1. 1. 2012 – 31. 12. 2012
20%
14%
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1. 1. 2013 – 31. 12. 2014
21 %
15 %
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1. 1. 2015 –
21 %
15 %
10%

*Platí jen pro kojeneckou výživu, léky, knihy a hudebniny.

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Excise duty
•Increasing rates with the target of minimal EU rates (harmonization)
•Tax on cigarettes – two component’s tax introduction
•Alcohol, fuel – already on European level
•Ecological tax - since 2008

Social Security Contribution
•Compulsory
•Pension scheme – 28%
–Employee – 6,5%
–Employer – 21,5%
•Sickness insurance – 4,4% (Employer)
•Contribution to Employment policy 1,7% (Employer)
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Health insurance
•Compulsory
•Employee – 4,5%, Employer – 9%
•Low private payments for the health care (paiyment for medicaments etc.)
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Statistics
•Tax Database
•http://www.oecd.org/ctp/tax-policy/tax-database.htm
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Reading – OECD Library
•Economic Growth and the Role of Taxation-Theory •Tax Administration 2015 (Comparative Information
on OECD and Other Advanced and Emerging Economies)
•Taxing Wages 2015
•Revenue statistics 2014
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•Thank you for your attention!