Dear ladies and gentlemen,
in attachment please find English/Czech version of Newsletter about actual topics: Tax Law Amendments within Govermental savings and Amendment to Employment Act.
If you have any questions, please contact us.
Yours sincerely, Accace team
Tax Law Amendments within Govermental savings
The Lower House of Parliament on 7 June 2012 approved within its First Reading proposal of the amendments for Govermental savings. In the tax field it includes especially the following:
- Increase of the VAT rates by 1%, i.e. to 15% and 21%.
- Implementation of the new solidarity tax for employees and enterpreneurs with the income exceeding 4 times the average salary (approx. CZK 100 thousand per month). 7% tax will be applied on the difference.
- Increase of the real estate transfer tax by 1% to 4%.
- Cancelation of the cap on health insurance contributions.
This proposal will undergo further legislative process and may thus be changed. We will inform you on the further process.
Amendment to Employment Act.
As of January 4, 2012 the Act No. 435/2004 Coll., On Employment, was amended (the “AoE”).
According to Section 136 thereof it is now the duty of the employer to have copies of the work contracts or other documents proving the work relationship on the place of work, especially regarding workers present on the place of work and in case that foreigners are present, also document proving the legitimacy of their stay in the Czech Republic. This duty is subject to control of the Work Inspection Office and its violation is considered to be a breach of the ban of illegal employment.
Amendment to Ministerial Order No. 484/2000 Coll., regulating the payment tariff for attorneys-at-law (the “Ministerial Order”).
Also we would like to draw your attention to the fact that as of March 1, 2012 the Ministerial Order which sets the fixed payment tariff for representation by an attorney or a notary when deciding on the compensation of costs of the civil proceedings, was amended. In case of victory in such dispute with its value up to CZK 1.000 the party represented by an attorney or notary will receive compensation from CZK 1.000 to CZK 2.500 instead of former CZK 4.500.
We again draw your attention to the crucial amendment to Act No. 513/91 Coll., the Commercial Code, as amended („CC“) regarding the limitation of damages and termination of the contact upon the payment of agreed compensation effective from 2012.
The contracting parties may agree upon the limitation of damages that may be incurred by any of the party in the future due to the breach of its contracting obligations or exclude such damages. Such clause would be invalid if the damage was caused intentionally, the clause would restrict the consumers´ rights or it was against good manners.
As of 2012 any contracting party, if agreed so, may terminate the agreement on the basis of payment of agreed compensation even though the party has already rendered or accepted the performance (until the end of 2011 it was not possible to do so). The crucial part of such agreement would be regulation of their mutual claims under the contact (ownership titles, claims from defects etc.) which should be valid and effective after the termination thereof. Presumably, such agreements may be practical for the long –term contracts, high risky transactions or the contracts with great volume of performance.
