Negotiated amendments18/02/09 / cata_tax-news

• Tax Rules

The Tax Rules, which were discussed for a long time and redrafted many times, were presented to the Parliament of the Czech Republic for negotiation. The Tax Rules should replace the Act on Administration of Taxes and Charges of 1992. Pursuant to the Finance Ministry, which prepared the Tax Rules, they should be simpler and more unambiguous than the existing act. The Tax Rules bring an entirely new terminology. Significant conclusions from the existing judicature of the Supreme Administration Court and the Constitutional Court have been included in a number of its provisions.

At the first sight, it is evident than it is a modern norm. It will be interesting to monitor how this norm will pass through the legislative process. We will inform you of the course of approval of the Tax Rules and will notify you of important changes that will affect the process of collection and payment of taxes. The effectiveness of the Tax Rules is proposed since 1 January 2010.

• Amendments to acts concerning tax administration

In connection with the Tax Rules, a separate act is submitted amending other legal regulations relating to tax administration. The Tax Rules should affect about two hundred other legal norms, such as the Code of Civil Procedure, Act on Court Fees and Act on Administrative Fees, Accounting Act, substantive-law tax regulations and others.

• Amendment to act on public health insurance

The government submitted to the Chamber of Deputies a proposal a draft amendment to Act No. 48/1997, Coll., on Public Health Insurance (print 691/0). The submitted draft act also contains proposed changes to Act No. 592/1992, Coll., on General Health Insurance Contributions, Act No. 551/1991, Coll., on Všeobecná zdravotní pojišťovna České republiky, and Act No. 280/1992, Coll., on Branch, Industry, Company and Other Health Insurance Companies. The purpose of the proposed amendments is in particular achievement of terminological compliance with the proposed acts in the field of health care services.

The amendment incorporates the results of the coalition agreement concerning regulation fees, i.e. exemption of children from six years of age from the fee for visiting a doctor and reduction of the fees limit and fees that are included in such limit for older children.

Further, it is proposed to carry out amendments leading to alleviation of the administrative burden of certain payers of the social security contributions; the alleviation arose in connection with the changes performed in Act No. 48/1997, Coll. by Act No. 261/2007, Coll., on Stabilization of Public Budgets, which included all persons with employment income and emoluments into the category of employees. Under such extension of the range employees, it was not taken into account whether such income is one-time income (e.g. remuneration for a court witness, remuneration for members of an election committee during election to the Parliament or municipal offices of municipalities or regions, one-time remuneration of a director of an association, etc.) or repeated income (such as a regular monthly remuneration for a member of a commercial company’s body or a member of a statutory body) or whether the activities from which such income arise or is to arise took several days, months or years and what is the aggregate amount of such income. It is therefore proposed to exclude persons whose income is not regular from the category of employees for the purposes of the cited act or to include them in the category of employees only in the calendar months in which their income amounts to the amount set forth by law.

The last area of proposed changes are parametrical amendments to price regulation and payments for medications established on the experience from the first eight months of the new system that determined prices and payments and the comments of the European Commission on the current legal regulation. In particular, this concerns specification of the procedure for using a foreign reference for determination of the amount of payment for medications from the public health insurance.

• Amendment to the Price Act

The draft governmental amendment to the Price Act extends the possible range of price interventions by the cases where this is required by EU laws (such as Commission Regulation (EC) No. 657/2008 dated 10 July 2008, which sets forth implementing rules for Regulation of the Council (EC) No. 1234/2007, concerning a support by the EU to provision of milk and certain milk products at schools). In the field of goods pricing, the provisions of Directive No. 98/6/EC concerning protection of the consumer in pricing of products offered to the consumer were incorporated into the draft; pursuant to the cited provisions, the seller is obliged to designate the product by the final price to which no further amounts can be added.  These provisions will also have impacts on taxes, since the final offered price always includes all taxes, customs and other duties. The act also newly defines administrative violations and amounts of penalties that may in certain cases amount to CZK 1,000,000, and in case of the most serious infringements of obligations even CZK 10,000,000. The act shall affect in particular the following entities:

1. Entrepreneurial entities selling and purchasing goods that do business in industries that might become subject to price regulation

2. travel offices and agencies selling holiday packages and other touristic services

3. sellers and purchaser who infringe price regulations

It has been proposed that the act become effective from 1 October 2009.