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Liberec Region The Czech Economy in 2006 A Few Comments on Taxes The Most Important Changes in Czech Law in 2007 Liberec Region 03-04 2007 CONTENTS Ministry of Industry and Trade I INTRODUCTION CZECH BUSINESS Question of the Month for Martin Říman, Minister of Industry and Trade .............4 AND TRADE I ECONOMIC POLICY Economic Bi-monthly Magazine with a Supplement is Designed for Foreign The Czech Economy in 2006 ..................................................................................5 Partners, Interested in Cooperation Foreign Investors Acquire Mainly New Tangible Assets in the Czech Republic........7 with the Czech Republic I HOW TO DO BUSINESS IN THE CZECH REPUBLIC Issued by: A Few Comments on Taxes ....................................................................................9 The Most Important Changes in Czech Law in 2007 ...........................................11 PP AGENCY s.r.o. Myslíkova 25, 110 00 Praha 1, Czech Republic Distance Contracts Subject to Special Rules..........................................................13 PP Agency Company with the ISO 9001 certified quality I CZECH TOP management system for publishing services Sapeli Operates on Foreign Markets .....................................................................14 EDITORIAL BOARD: Merko CZ is Focused on the Balkan Market.........................................................15 Martin Tlapa (Chairman), Ivan Angelis, Success of Biomass ...............................................................................................15 Zdena Balcerová, Jiří Eibel, Zbyněk Frolík, Růžena Hejná, Alžběta Honsová, Josef Jílek, I Ivan Jukl, Zdeněk Kočárek, Marie Košťálová, REGION Marie Pavlů, Pavla Podskalská, Josef Postránecký, NUTS 3 – Liberec Region ...............................................................................16–29 Libor Rouček, Jiřina Semanová, Jarmila Škvrnová I INVESTMENT MANAGING EDITOR: Jana Vápeníková 2006: Largest Foreign Investment in the Czech Republic .....................................30 EDITORS: I SERVICES Jaroslava Bradová, Naďa Vávrová Focus on the Environment in the Czech Republic .............................................32 REGULAR COLLABORATORS: Eva Tomášková I PRESENTATION OF FIRMS PRECIOSA, a.s.........................................................................................................2 TRANSLATION: Vlasta Benešová, Alena Kenclová, EMPLA spol. s r.o. .................................................................................................31 Robert Krátky, Dagmar Šímová, GEOtest Brno, a.s. ................................................................................................33 Halka Varhaníková SkloAtelier Evans s.r.o. .........................................................................................35 Veletrhy Brno, a.s..................................................................................................36 READ: Mathew Booth, Ivana Kadlecová, Katherine McCloghry, Zuzana Pavlíčková Pro - Tex s.r.o., Cadence Innovation k.s., MSV SYSTEMS CZ s.r.o., Ewals Cargo, Care s.r.o., Doska Česká Lípa, s.r.o., Cutisin, s.r.o., ZVVZ-Enven Engineering, a.s. GRAPHIC DESIGN: Miloslav Bucvan, Helena Dvořáková Cover: www.orangedisc.cz DEADLINE: 24/1/2007 ADDRESS: Myslíkova 25, 110 00 Praha 1 Czech Republic Phone: +420 221 406 623, +420 221 406 626 Fax: +420 224 934 383 e-mail: [email protected] www.ppagency.cz www.mpo.cz/cbt Press run: 13.500 copies. The number of printed and sold copies Liberec of the journal is verified by auditor, HZ Praha, s.r.o., member of PANNELL KERR FORSTER Worldwide. It is not allowed to reproduce any part of the contents of this journal without prior consent from the editor. Attitudes expressed by the authors of articles carried by CBT need not necessarily be consistent with the standpoint of the Publisher. MK ČR E 6379, ISSN 1211-2208 „Podávání novinových zásilek povoleno Českou poštou, s. p., odštěpný závod Přeprava, č. j. 3468/95, ze dne 24/10/1995“ A Few Comments on Taxes Foreign Investors Acquire Mainly New Tangible Assets in the Czech Republic 3 | INTRODUCTION Question of the Month for Martin Říman, Minister of Industry and Trade I a decree on health aptitude for driving The Programme Declaration of the motor vehicles, and others. It is clear that new Czech Government promises the simplification of laws and decrees is a number of changes for not a matter of a few months - it takes entrepreneurs. Which changes do more than half a year on average to you consider the most important amend a law. The process is gradual, but and most beneficial to its results will simplify communication entrepreneurs? And why? with the authorities and reduce The Government’s Programme Declaration paperwork. For example, the number of lays special emphasis on improving statistical reports many companies are conditions for sole traders and small obliged to fill in and the number of entrepreneurs. Most of the changes we institutions will be reduced. are preparing will facilitate the operation of all companies, both large and small, I but it is the latter that we want to pay the Which measure will be particularly most attention to as large companies helpful to Czech entrepreneurs? Are manage to cope with various you, for instance, still considering administrative obstacles one way or tax holidays for sole traders? another. A principle example of the simplification We plan, on the one hand, to simplify of the business environment will be the business environment and to modify a major amendment to the Trades the tax system. In both these areas our Licensing Act. This Act has undergone aim is to create an environment where the several dozen amendments since the early state burdens sole traders and the self- 1990’s and it has more than doubled in employed neither by unnecessary size. This is why the changes we are paperwork nor by excessive taxation and preparing will be aimed at deregulation. social and health insurance payments. An For example, some trades will be merged environment that rids those who or transferred to other categories and the contribute significantly to the wealth of possibility to perform unregulated trades society of the feeling they are victimised will be broadened. For instance, we know by the state for their activities. there are 138 craft categories in the Czech Republic. In comparison to Austria, I where there are several dozen more, our What progress has been made with situation is not so bad. Sweden, however, the project you launched last year recognises only 62 such categories, which to cut the paperwork burden for is, of course, inspiring. Merging certain businessmen? trades and reducing their number will One of the main tasks of the Ministry is at make life easier for those who want to present to simplify legislation governing start a new business. They will need fewer business activities. The aim of the project trade licenses, which will save them is simply to remove unnecessary passages money. Launching a business will thus no from all business laws and decrees. For longer involve searching a long list of MORE AT: this reason, we have created a chart recognised trades. Applicants will, for mapping all regulations concerning instance, no longer have to contemplate www.mpo.cz entrepreneurship. So far, there are over whether to register as a blacksmith or 150 and more will yet be added. It should a hammer-smith. www.czechtrade.cz be noted that not all of them fall under As far as the introduction of tax the competence of the Ministry of holidays for sole traders is concerned, www.ceb.cz Industry and Trade. Specially identified I am happy to say that it is included in the areas are thus the subject of consultations Government‘s Programme Declaration. www.egap.cz with other ministries. We can already However, it is clear that the Government report the first results, such as an will first need to debate the issue. I will do www.export.cz amendment to the decree on hygiene my best to persuade my colleagues and requirements for restaurants, ongoing especially the finance minister of the preparations for an amendment to benefits of this proposal. | 4 CZECH BUSINESS AND TRADE The Czech Economy in 2006 The Czech economy has I GDP GROWTH WAS recent years was the economic recovery evidently experienced another BASED ON DOMESTIC of the EU countries, to which most Czech DEMAND exports are heading – 84% of total very favourable year. Economic As in 2005, last year’s economic growth exports in the first 11 months of last year growth remained near 6% as it within the Czech Republic rested on as it had been in 2005. Statistics confirm was in 2005, inflation increased sound ground and created no potential that exports to the common market are only slightly, unemployment problems which could have an adverse increasing at a two-digit rate – expressed effect on the economic stability in the in CZK, it would be 14.3% and in EUR, declined, and the balance of coming years. Whereas the 2005 GDP which gives a better idea of the value of trade was apparently the best growth was primarily due to increasing Czech exports owing to the steady since the beginning of the exports accompanied by a noticeable strengthening of CZK, as much as 20.2%. improvement of the balance of trade, last Last year’s increase in exports to the independent Czech Republic. year’s growth was based mainly on common market was mainly due to The continued growth again domestic demand, specifically on machinery and transport equipment, and narrowed the gap in the investment followed by household
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