An essential fact that may impact indirectly the tax liability of Czech companies is the end of the seven-year (2007-2013) period for taking regional aid via EU programs and the starting of a new one, which will be related to new rules in this area beginning 2014. The new rules present a reduce in the basic rate of regional aid for large enterprises from 40% to 25%, as well as stricter requirements on the basis of time and technical parameters when filing applications for investment incentives.
Though the utilities of these new rules has been postponed to July 1, 2014, opportunities still remain for those considering investments to prolong production capacity, initially in the form of acquiring new machinery in the following 3 years with minimum amount of CZK 100 million (or CZK 50 million in specific areas) (nearly US $3.5 million and US $1.8 million, respectively). Until the end of January and the starting of February 2014, it is still possible to file applications for investment incentives under the current regime, which is more favorable for large enterprises, so that they can be approved before July 1, 2014.
