Dividends, remuneration (salary), of benefits?

Are we facing a re-instalment of dividend tax?

19 August 2013

One of the political parties requires the government in resignation to re-install the tax on dividends once the Parliament is dissolved. The tax is to be abolished from 1 January 2014.

Let us disregard the fact that it is again another twisting of the Constitution and that we will spend Christmas waiting for information what will be valid for 2014 (furthermore, we still do not know how the VAT will look like, what about the personal/corporate income taxes and not to forget the “one collection point” approach, etc.).

Let us concentrate on an example:

There is a company having operating profit CZK 100. The company wants to distribute the profit among its employees and shareholders:

- CZK 100 for employee minus social security/health insurance for employee and employer equals CZK 51 net income.

- CZK 100 for self-employed co-workers minus his taxes and insurances (with a 60% lump sum) equals CZK 85 net income.

- CZK 100 for shareholders (TODAY) minus taxes = CZK 69 net dividend.

- CZK 100 for shareholders (2014) minus taxes = CZK 81 net dividend.

The Czech Republic faces a problem with significant tax and social security/health insurance burden on income from work, not single or double taxation of dividends. It is obvious that companies are considering different ways of engaging self-employed individuals (the number of self-employed increases) or introducing dividend schemes.

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Made by AG25 s.r.o., 2013
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"WE ARE HERE TO SUPPORT YOUR SUCCESSFUL BUSINESS"
”PRO FACTUM IS THE ONLY COMPANY THAT SPECIALIZES IN PERSONAL TAXATION, ADVISORY IN TAX PROCEEDINGS AND REPRESENTING IN FRONT OF AUTHORITIES”
"PRO FACTUM IS THE ONLY COMPANY THAT SPECIALIZES IN PERSONAL TAXATION, ADVISORY IN TAX PROCEEDINGS AND REPRESENTING IN FRONT OF AUTHORITIES"
”OUR APPROACH IS INDIVIDUAL AND STRICTLY DISCREET”
"OUR APPROACH IS INDIVIDUAL AND STRICTLY DISCREET"
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