On 22 January 2020, the final draft Bill regarding the digital service tax (DST) was published in the Parliament. This Bill proposed to introduce a single digital tax of 7% for companies with a global revenue thresholds of EUR 750 million and domestic turnover of at least CZK 100 million.
On the contrary, under this Bill, companies for whom the provision of digital services is a marginal activity will not be subject to digital tax. The key factor will be the share of collection from taxable services in total revenues within Europe. Companies with a maximum share of 10% will be excluded from the scope of the Act. At the same time, these companies will be obliged to notify it to the tax administrator in advance.
The law enactment will depend on the legislative process, the expected start of the digital tax in the Czech Republic is in mid-2020. The applicability of the law will be limited in time. The last tax period in which the DST will apply will be the year 2024.
