Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

May 18, 2021
2021-5567

Czech Republic moves forward with Digital Services Tax

Plans to introduce a Digital Services Tax (DST) in the Czech Republic are back on the agenda after a long pause.1 On 12 May 2021, the Bill covering the new tax passed its second reading in the Chamber of Deputies, bringing it one step closer to coming into effect.

The Czech digital tax bill has experienced challenges in development since its inception and the basic parameters of the new tax are still not clear. For example, members of Parliament are debating what tax rate should apply and discussing a rate ranging from 2% to 7%. The current consensus appears to be that a 5% rate should apply, but the adoption of a variety of different rates for different types of services cannot be ruled out completely at this stage.

It is also not clear when the new tax will enter into force (if passed). The start date was originally expected in mid-2020, then at the beginning of 2021 and now there is discussion of a possible entry into force date of 1 July 2021. However, there is also discussion of 1 January 2022 as the possible entry into force date.

Future Alerts will monitor the development of this initiative, including the final legislation.

_________________________________________

For additional information with respect to this Alert, please contact the following:

EY Czech Republic, Prague

_________________________________________

Endnotes

  1. For background, see EY Global Tax Alert, Czech Government proceeds with legislation on Digital Services Tax, dated 20 October 2020.
 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more