A company with European jurisdiction has ceased to be a luxury and has even become a necessity. It doesn’t matter if you are engaged in foreign trade, asset management or IT development. Since the beginning of 2018, an account with most EU banks is opened only to companies registered in the European Union.
Advantages of a company in the Czech Republic:
● The country's geographical position makes logistics inexpensive for doing business in the EU;
● Stability in the economic, business and legislation area;
● Ease of obtaining a Schengen multivisa for regular trips and long stays in Czech territory. The presence of a company in the Czech Republic gives the right to obtain a residence permit, and then apply for citizenship;
● It is possible to buy a company and open an account without a personal presence;
● Lack of currency control;
● In the Czech Republic, the registration of cooperatives, branches of foreign companies, a joint venture, a joint stock company, a closed joint stock company, partnerships with a different form of responsibility is allowed.
Now about taxation. Without a doubt, a“white” European company is deprived of the opportunities for tax maneuvers that classic offshore companies offer.
Corporate profits in the Czech Republic are taxed at a rate of 19%, but do not forget about competent tax accounting. The real rate can be reduced to zero or a loss can be declared at the end of the year - Czech tax authorities are much more loyal to such situations than, for example, in Cyprus.
A Czech company is recognized as a VAT payer in the past 12 months, the turnover of which has exceeded one million Czech crowns. For this, an application for registration as a VAT payer is submitted through the Czech Republic tax portal within 15 days.
At the same time, trade operations performed outside the Czech Republic are subject to VAT at a zero rate. The same applies to the export of goods and services from EU countries to the Czech Republic.
Fully exempted from VAT in the Czech Republic are:
- post services;
- broadcast radio and television programs;
- financial and insurance activities;
- sports activities;
- implementation and production of medical services and goods;
- services provided in the social sphere;
- lottery.
The rest is subject to one of three VAT rates: basic - 21% and two lowered - 10% and 15%. Here are the product groups that they belong to:
Basic 21%
All goods and services, except:
Reduced 10%
- food for children;
- medical equipment and means for the rehabilitation of patients;
- medical equipment and means for veterinary medicine;
- books, newspapers, magazines and print media other than advertising.
Reduced 15%
- water, gas, heat, cold, electricity;
- repair of medical equipment, accommodation services, cleaning, organization of cultural, artistic and sports events;
- import of works of art, collectibles and antiques;
- some types of construction work.
In some cases, it is more profitable for a company or an individual entrepreneur to register as a VAT payer even if its turnover allows not to do so. Voluntary registration is carried out in the same way, but such payers are allowed to pay tax once a quarter (mandatory payers - once a month).
The main advantage of registering a company and opening an account in the Czech Republic is the loyalty of regulatory authorities to business. Timely submission of reports and payment of taxes guarantees the absence of additional interest in your company. Infrequent checks, as a rule, take place remotely and are limited to requesting primary documents for a particular operation.
