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Communication of the Finance Ministry

Information of the FM dated 23 December 2008 on the amendment to the Real Estate Tax; flat rates for conversion of foreign currencies for 2008; Instruction No. D-320 on Average Prices of Fuel

  • Information of the FM dated 23 December 2008 on the amendment to the Real Estate Tax

FM wishes to note the tax exemption of construction of new constructions and apartments in new constructions has been cancelled effective 1 January 2009. Formerly these exemption were provided for a period of 15 years. The earlier recognized claim to tax exemption shall be permitted until the end of 2009. From 1 January 2009, claims for tax exemption of new constructions shall no longer be recognized, which will affect constructions or apartments completed in 2008. Similarly, tax exemption is cancelled for insulation of constructions.

  • FM determines flat rates for conversion of foreign currencies for 2008

The uniform rates were published in Instruction No. D-321 on the FM website on 14 January 2009 and are intended for payers who do not keep accounting books. From the list of uniform rates, we mention several conversion rates, such as 25.05 CZK per euro, CZK 17.11 per US dollar and CZK 80.54 per 100 Slovak Crowns. The list contains a total of 35 foreign currencies. The Tax payers shall use a conversion through a third currency, to be agreed upon between them for conversion of foreign currencies that are not listed by the CNB.

  • FM issues Instruction No. D-320 on Average Prices of Fuel

Pursuant to instruction dated 14 January 2009, in case of the tax payers’ own road vehicles not included in business assets and in case of road vehicles borrowed for free, the following average prices of fuel in Czech crowns per litre may be used for determining expenses for consumed fuel:

Special gas (BA-91): CZK 29

Natural gas (BA-95): CZK 30.34

Super plus gas (BA – 98.99, 100): CZK 32.65

Normal gas (BA-91): CZK 29.85

Engine oil: CZK 31.68

Where the tax payers use higher prices, they must present documents proving fuel purchase. FM states in the instruction that tax payers may also use average prices per litre set forth in the Ministry of Labour and Social Affairs’ Decree No. 357/2007, Coll. for the year 2008 pursuant to authorization by the Labour Code. The average prices set forth by the Decree amount to:

Gas with 91 octanes: CZK 30.60

Gas with 95 octanes: CZK 30.90

Gas with 98 octanes: CZK 33.10

Engine oil: CZK 31.20

The tax payer decides which average price shall be used. The survey clearly shows gasoline prices set forth by the Ministry of Labour and Social Affairs’ Decree to be higher than those set forth by the FM, but the opposite is true in the case of oil.

The FM also notes that no new instructions determining the average prices of fuel shall be issued and in the future tax payers shall proceed pursuant to relevant decrees issued by the Ministry of Labour and Social Affairs.

For 2009, the average prices set forth by the Ministry of Labour and Social Affairs’ Decree No. 451/2008, Coll. are as follows:

Gas with 91 octanes: CZK 26.30

Gas with 95 octanes: CZK 26.80

Gas with 98 octanes: CZK 29.00

Engine oil: CZK 28.50

The rates of the basic reimbursement for use of a road motor vehicle not included in the payer’s business assets are set forth by Decrees of the Ministry of Labour and Social Affairs. For 2008, this rate amounted to CZK 4.10 per kilometer. From 1 January 2009, this rate was reduced to CZK 3.90.

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