Investor Presentaiton
Income tax relief
Calculation
The tax treatment of anew company (plant) dif
fers from that of an expanded facility only in
the calculation of tax relief that can be claimed.
For new companies, taxpayers are entitled
to full tax relief, excluding tax on net interest
income.
For the expansion of an existing plant, the
amount eligible for tax relief is the difference
between the tax relief that would be available
for a new company and the average of the tax
liabilities in the three years immediately pre-
ceding the first year in which tax relief can be
claimed. The latter figure is adjusted with refer
ence to industrial inflation and the current tax
rate. This formula represents a rough attempt
to limit the amount eligible for tax relief to any
additional profits resulting from the expansion.
Permissible level of state aid and subsidy
amounts
The total value of incentives must not exceed
the maximum permissible level of state aid.
The maximum amount of state aid is based on
the rules set by the EU and is set at 25 percent
of eligible costs (investment in land, buildings,
machinery and equipment and selected intan-
gible assets) except for Prague, where no in-
centives can be provided.
For technology centres and business support
services centres, eligible costs may alterna-
tively comprise the wage costs of employees
in newly created jobs within 24 months of the
month in which a particular position was filled.
Job creation
Cash grants will be provided to employers cre-
ating new jobs in regions with unemployment
at more than 25 percent above the national av-
erage or in special economic zones. The cash
grants may amount to CZK 100,000 - 300,000
per new job.
Training and retraining of employees
Cash grants for the training and retraining
of employees will be provided to employers
in the form of partial reimbursements of the
costs incurred. Subsidies may cover 25 percent
of the eligible costs of employee training and
retraining.
Purchase of construction sites
The actual provision of this incentive depends
on negotiations with the owner of the land
(state, region or municipality). The difference
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