The Czech Republic is one of the first countries to have commenced the implementation process of a top-up tax into the tax system. The Czech Top-Up Tax Act is a transposition of an EU Directive (Council Directive 2022/2523 of December 14, 2022) and is based on the OECD BEPS project Pillar Two initiative. It is definitely worth becoming acquainted with the basic principles of this new tax.
The primary motivation for this initiative is the minimalization of “unhealthy” competition among tax jurisdictions to lower their domestic corporate tax liabilities in order to attract foreign groups. Based on the consensus achieved among OECD countries, the appropriate effective rate of corporate taxation in a jurisdiction should not be less than 15%.
The basic concept of the top-up tax is the identification of jurisdictions where… Read more
