Tax support for entrepreneurship and innovation

The first of these instruments, introduced at the turn of the millennium, were investment incentives, which substantially increased employment levels in underdeveloped regions. Over the past two decades, investment incentives have undergone a turbulent development in legislation and case law alike and have become an integral part of Czech tax law.  Frankly, the outcome is a mess – a labyrinthine complex of laws and a litter of judicial rulings that are difficult to navigate for taxpayers who lack the professional experience needed take advantage of the incentives. To make matters worse, the tax administration, well aware of the significant negative impact on the state budget revenue, keeps the recipients of incentives under close scrutiny. The notification of a tax audit after the expiry of the period for drawing investment incentives is almost a certainty, and the potential penalties are enormous. We have therefore set up a special team of experts to guide our clients through the rigmaroles of obtaining and keeping the investment incentives. If you have been promised an investment incentive or are just considering applying for one, we are ready to provide you with the benefit of our many years of experience and the necessary, and very beneficial, tax support throughout the entire process.

Shortly after investment incentives, a deduction for research and development was introduced into the Income Tax Act. This instrument is intended to motivate taxpayers to innovate, develop know-how and create products with high added value. Many companies engage in R&D in the normal course of their business and the deduction is a nice bonus in that it allows them to claim such costs twice. In practice, however, taxpayers often face an unfriendly and overly formalistic approach on the part of the tax authorities, which are unfortunately broadly backed up in this practice by administrative courts. Not infrequently, a trivial mistake leads to the entire deduction being disallowed, to assessments of supplementary tax and significant penalties. With the help of our specialists, you can eliminate this risk. We have many years of experience in this area and we will be happy to share it with you.

Less than a decade later, a deduction for vocational and professional training was introduced into the Income Tax Act to motivate entrepreneurs to help with the practical training of high school and university students and to increase their future employment potential. At present, this support is provided in the form of a deduction, the amount of which depends on the length of time worked by the student. This deduction also allows eligible companies claim the cost of acquiring assets for professional and vocational training twice. If you are interested in taking advantage of this support, we will be happy to assist you.