Czech Finance Minister On Tax Avoidance
The Czech Republic has lost billions of crowns a result of companies moving their domiciles to overseas jurisdictions including Bermuda, Finance Minister Miroslav Kalousek said in discussion programme “Partie” ["The Match"] on the Prague television yesterday [Apr. 7].
But the conservative politician said such corporate tax avoidance strategies are legal and will likely continue until Czech taxation rates are lowered.
The number of Czech companies now based in what the Finance Minister referred to as “tax havens” grew to around 12,500 last year. And Czech firms will leave in greater numbers if domestic taxes are raised, he said, hinting at statements made by the opposition Social Democrats [CSSD] who plan to hike corporate taxes if they are victorious in the country’s next election.
Mr. Kalousek also refereced the signing of agreements with some countries labelled as tax havens — including Bermuda – that now enable the exchange of information between tax administration authorities on whether companies comply with all of their legal obligations.
“The possibility that the Czech state budget will lose money from those residents who are in these havens is minimised thanks to these agreements,” Kalousek said.
There is only one plan to attract such companies back to the Czech Republic and that involves cutting income tax sharply, according to Mr. Kalousek.
The biggest growth in the number of Czech companies based in overseas jurisdictions in absolute terms was registered by Cyprus, the US and the Seychelles in 2012. From a relative point of view, companies showed the biggest interest in Bermuda, Belize and the Seychelles.
