Loosening the Belt: Number of Overweight Czechs Significantly Rising
Christmas is long behind us and we are already several weeks into the New Year. Weeks during which – according to statistics – the majority of us lose interest in or the will to keep their New Year’s resolutions, including probably the most frequent one – to lose weight and start exercising more. This is a pity considering that 71% of men and almost 57% of women in the Czech Republic are suffering from excessive weight or obesity: the highest percentages ever recorded. Read more at www.ceskovdatech.cz.
Industry 4.0: Are you ready for another revolution?
Executives and government agency leaders are positive about Industry 4.0. These are the results of our latest study regarding Industry 4.0, according to which 87% of the respondents believe that the Fourth Industrial Revolution will lead to greater social and economic equality and stability. In fact, two out of three say business will have much more influence than governments and other entities in shaping this future.
Taxes. Who would be happy about paying them? However, as we all probably know, schools, the police, civil servants and the social system need to be paid for somehow. The issue is, rather, how great the tax burden is and how it is developing. There is a whole series of tax burden indicators. The frequently used ones include, for example, the composite tax quota, or the ratio of taxes paid to gross domestic product. Nevertheless, there may be large differences between GDP and what is actually obtained from it in terms of individual countries. For this reason, we use a different indicator – Tax Freedom Day – which works in a slightly different way.
The method applied by us in calculating Tax Freedom Day divides the year into two parts in a proportion corresponding with the ratio of total government sector tax income to net national income. Gross domestic product, which is sometimes used in similar calculations, is a rough approximation of income. In producing gross domestic product, production facilities are subject to wear and tear. If fixed capital consumption is deducted from GDP, the result is net domestic product. However, this cannot be considered an appropriate approximation of the income of domestic companies and households either. A portion of profit from production and sales is attributable to foreign investors. In fact, the significance of repatriating (as well as reinvesting) profits has recently grown. By taking into account income, which is part of the balance of payments, you arrive at net national income. This can be divided into taxes and net disposable income.
What is the situation like this year then? In 2018, no changes have been made to any significant tax rates; however, the changes in the tax system are rather numerous. For example, the first child tax allowance has increased, lower flat expense charge-off rates have started to apply to entrepreneurs and the conditions for obtaining a tax bonus have been tightened. The increase in the minimum salary has affected the amount of the ‘nursery fee’ and, as such, the effective taxation of individuals. In addition to the above-stated changes, this year’s tax collection will be also affected by the Local Sales/Purchases Report (‘kontrolní hlášení’) introduced earlier and the electronic sales records being gradually rolled out. Although the rates are not rising, the more effective and efficient tax collection is increasing the total amount collected and, as a result, also the tax burden indicators, such as Tax Freedom Day.
Looking back at prior years, Tax Freedom Day is gradually slipping further away from the start of the year. This year’s date is the latest ever recorded. Mark your diaries – it will be on 23 June.
The number of days for which tax payers in the selected countries of the EU need to work in order to pay taxes to the government and the date of Tax Freedom Day
The 9th Edition of the Act of the Year has been Launched
The ninth edition of the traditional Act of the Year survey has started. As in previous years, Ambruz & Dark Deloitte Legal is searching, along with its partners, for the most beneficial legislative act of the past year which has had a positive impact on the Czech business environment. The Nomination Committee has selected five legal regulations about which experts may vote until the end of March 2018:
New players on the payment market (the Payment System Act implementing PSD2);
Faster and simpler construction (the amended Construction Act);
Stop to the excessive burden on entrepreneurs (a Constitutional Court ruling on the electronic sales records);
More efficient and effective court procedure (the amended Code of Civil Procedure); and
Tax regulations reflecting practical needs (selected amendments to the Income Taxes Act – primarily in respect of assets).
Do you have a favourite? Do not hesitate and cast a vote yourself!
We are launching the 5th edition of the Central Europe R&D Survey 2018. We are interested in the private sector‘s approach to investing in R&D. We aim to identify factors driving the increase in investment in R&D and determine key obstacles in claiming R&D tax relief and using R&D grants. The survey results may be used for potential negotiations regarding legislative changes in the area.
The survey is carried out in nine Central European countries – the Czech Republic, Estonia, Croatia, Lithuania, Hungary, Poland, Romania, Slovakia and Slovenia.
What kind of policy would motivate you to increase R&D investments?
The winners of the 2017 Tax Advisor & Tax Firm of the Year survey have been announced, including two of our colleagues! As they have both ranked in the 2017 Tax Advisor of the Year survey, Jiřina Procházková, an Ambruz & Dark Deloitte Legal attorney, and Tomáš Brandejs from Deloitte’s tax function are two of the greatest tax specialists of 2017. Jiřina Procházková won in the Tax Administration Advisor category and Tomáš Brandejs – along with becoming the tax personality of the year – won the VAT Tax Advisor category. Congratulations!
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