Act No. 113 / 1971 Coll.
Law on Pension Tax and Social Security
Valid
Effective from 01.01.1972
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113
THE LAW
of 7 October 1971
on pension and social security contributions
The Federal Assembly of the Czechoslovak Socialist Republic decided on this law:
Preliminary provisions
This law is governed by
(a) pension tax (profit tax);
(b) social security contributions.
Pension tax payers
(1) Dani is subject to:
(a) cooperative organisations (cooperatives, their higher organisations, the Central Council of Cooperatives, cooperative undertakings including foreign trade undertakings), with the exception of single agricultural cooperatives, joint agricultural holdings, joint cooperatives and melliorative cooperatives;
(b) economic organisation of municipal services, local industry, collection of raw materials, regional organisation for the development and implementation of new technology in the local economy and regional transport centres;
(c) district (urban) construction undertakings;
(e) Directorates-General, associations of organisations, provided that at least half of the subordinates or member organisations are subject to tax under this law;
(f) other socialist organisations, with the exception of budgetary and contribution organisations, their economic facilities (enterprises), if they are engaged in a permanent economic activity and whose relationship to the State budget is not regulated by other legislation; * *)
(g) organisations other than socialist, if they are legal persons;
(h) companies of commercial and civil law, institutes and foundations, undertakings of public corporations, associations of persons and other entities established abroad, with the exception of natural persons.
(2) The following shall be exempt:
(a) production and labour cooperatives for citizens with more severe health damage, economic (special) equipment of disabled associations employing citizens with more severe health damage and equipment of cooperative associations providing selective recreation for their members;
(b) housing cooperatives, folk housing cooperatives and other housing cooperatives (excluding district construction housing cooperatives) in respect of income from cooperative housing construction, maintenance (repair) of housing associations and repairs in the housing of members of such cooperatives;
(c) associations of housing cooperatives other than income from their own permanent economic activity; the exemption does not apply to undertakings and economic establishments established by these associations;
(d) artistic associations, cultural funds and socialist organisations representing authors or performers, as well as undertakings operated by such associations, funds and organisations, in so far as their activities relate to the mission of such organisations;
(e) organisations run economically by the higher authorities of the Communist Party of Czechoslovakia, the Revolutionary Trade Union Movement, the National Front Organisation, the Union for Cooperation with the Army and their economic facilities, which are directly involved in the budget of the social organisation in which they were set up, provided that the higher authorities of the social organisations determine the contributions at least equivalent to the profit tax under this law. The exemption shall not apply to basic organisations of social organisations and their economic facilities where they are engaged in a permanent economic activity.
Income Tax
Subject matter
(1) For the taxpayers referred to in § 2 (1) (a) to (e), (g), all activities and revenues arising therefrom are subject to tax. For cooperatives for the construction and management of garages, a permanent economic activity and revenues arising therefrom are subject to tax.
(2) For the taxpayers referred to in Articles 2 (1) (f) and 2 (2) (c), (e), a permanent economic activity and revenue arising therefrom are subject to tax.
(3) For the taxpayers referred to in § 2 (2) (b), the permanent economic activity and income arising therefrom are subject to tax, excluding income from cooperative housing construction and maintenance (repair) of housing associations and repairs in the housing of members of such cooperatives.
(4) For the organisations referred to in Paragraph 2 (2) (d), a permanent economic activity which is not related to the mission of such organisations and the revenue derived therefrom is subject to tax.
(5) For taxpayers who have their registered office in the Czechoslovak Socialist Republic, tax and income from foreign sources are applied; However, these taxpayers may deduct a similar tax paid abroad on such revenue, but not more than the amount of tax payable on those revenues under this Act.
(6) In the case of taxpayers who have their head office abroad, all activities within the territory of the Czechoslovak Socialist Republic and the income resulting therefrom, as well as all other revenue, the source of which is in the territory of the Czechoslovak Socialist Republic, are subject to tax.
Tax base
(1) The basis of the profit tax on taxpayers referred to in § 2 (1) (a) to (f) and § 2 (2) (b) to (e) is the balance sheet profit generated from the activities of the taxpayer pursuant to § 3 and from the management of the property, recognised in duly kept accounts, increased by the items to be added (hereinafter referred to as "attributable items") and reduced by the items that can be deducted (hereinafter referred to as "deductible items").
(5) For social organisations, income from membership contributions, donations and registrations shall not be included in the tax base.
(6) In the event that the taxpayer does not make a profit, the basis of the profit tax shall be the amount of the deductible items in excess of the deductible items; If the taxpayer recognises a loss, the basis of that tax is the amount of deductible items, exceeding the sum of losses and deductible items.
(7) For the taxpayers referred to in Paragraph 2 (1) (g), the taxable amount is:
(a) the profit or loss on the activity and on the management of the assets, plus tax under this Act, including accessories which have reduced the profit, on depreciation of the principal funds charged to the loss of profits, if they exceed the depreciation rate fixed for socialist organisations, on unproven costs and on costs not necessary to achieve or secure income; the contributions of members of the churches, gifts, proceeds of church collections and fees for church acts shall not be included in the tax base of the churches and their organisations;
(b) 30% of gross wage costs where the taxable amount referred to in point (a) would be less than 30% of gross wage costs or where the taxpayer shows a loss; This provision shall not apply to church organisations.
(8) For the taxpayers referred to in Paragraph 2 (1) (h), the taxable amount is:
(a) revenue from licences and similar fees and receipts for technical assistance;
(b) revenue from copyright and operating rights;
(c) interest and rent revenue;
(d) any other revenue, after deduction of costs necessarily incurred in the country for achieving, securing and maintaining them;
(e) 30% of the cost of gross wages for domestic work, where the taxable amount referred to in (d) would be less than 30% of the cost of gross wages for domestic work or where the taxpayer shows a loss.
(9) For debtors in liquidation and for debtors who have died without carrying out the liquidation, where the profit tax base cannot be determined in the manner set out in the preceding paragraphs, the basis of that tax shall be the excess of the liquidation.
Subordinated liabilities
(1) The attributable items are:
(a) the amounts by which the costs or revenues have been increased or reduced in breach of law, in the costs of the contributions and subsidies to which the taxpayer is not obliged by law to pay, free of charge, and the amounts by which the taxpayer has exceeded the binding cost limits laid down in the approved financial plan, the types of which are determined by the Government of the Czechoslovak Socialist Republic; * *)
(b) land tax refunds.
(2) The following items are added to the cost of the taxpayer:
(a) the difference by which fines paid and periodic penalty payments are higher than those received;
(b) surpluses to replace discharges of uncleaned or insufficiently cleaned waste water;
(c) air pollution charges, including the premium;
(d) the negative difference between the manka created and the mank compensation received for organisations having predominantly commercial activities.
Deductible items
The following items are deductible if they are not charged under the legislation in the cost or profit formation of the taxpayer:
(a) the land tax paid; the deductible item is not, however, the periodic penalty payment related to that tax;
(b) the difference by which the fines and periodic penalty payments received are higher than those paid;
(c) amounts received from another organisation established in the Czechoslovak Socialist Republic from funds which have already been subject to a profit tax or similar tax and items already subject to a profit tax on the same taxpayer if they are part of the profit;
(d) subsidies granted to cooperatives of disabled persons, undertakings of disabled persons and associations of housing cooperatives where they are included in profit.
Social security contribution
(1) The social security contribution shall be paid by the taxpayers referred to in Article 2 (1) (a) (except for district construction housing and garage construction and management cooperatives), (b), (c) and (e). *).
(2) The social security contribution shall be based on the amount of wage resources settled in the current year for payment, including additional remuneration, reduced by the remuneration to be paid to the best workers and collectibles of the amount received by the taxpayer as remuneration to the Red Battalion of the five-year or battalion, or as a standard to be established by it, and the remuneration to be paid in the current year under the copyright rules. * *)
(3) Social security contributions include sickness insurance. * *) Social security contributions are part of the taxpayer's costs.
Amount of pension tax and social security contributions by taxpayer group
Trade
(1) The rate of profit tax on taxpayers with a predominantly commercial activity, with the exception of the taxpayers referred to in paragraph 6, § 2 (1) (g), (h), § 2 (2) (c), (d), (e), § 20 (1) and with the exception of joint cooperatives and melliorative cooperatives
| při rentabilitě % | činí % |
|---|---|
| do 5 | 10,— |
| nad 5 do 15 | 10,—- + 2,— à |
| nad 15 do 30 | 30,— + 1,— à |
| nad 30 do 50 | 45,— + 0,5 à |
| nad 50 | 55,— |
(2) Profitability is calculated as the ratio of the balance sheet profit increased by the deductible item in accordance with Section 5 (1) (a) to the total costs, minus the amount by which the balance sheet profit was increased [Section 5 (1) (a)], to the nearest hundredth.
(3) The factor "à" referred to in paragraph 1 is equal to the percentage of profitability exceeding the lower limit of the relevant tax zone with a precision of one hundredth.
(4) The rate of profit tax shall be increased by a premium of 10% to the rate of tax referred to in paragraph 1 for all taxpayers with a predominantly commercial activity, except for consumer cooperatives with a predominantly commercial activity.
(5) The calculated profit tax is reduced by the discounts set out in Section 22.
(6) For foreign trade cooperatives, the rate of tax on profits is 75%.
(7) If the basis of the profit tax is the liquidation surplus, the tax rate shall be 50% of that surplus.
Fees with a predominantly commercial activity, including foreign trade cooperatives, pay a social security contribution of 20% on the basis of Article 10 (2).
Services, local production and local construction
(1) The rate of profit tax on taxpayers with predominantly non-commercial activities, except those referred to in § 2 (1) (g), (h), § 2 (2) (c), (d), (e) and § 20 (1)
| při rentabilitě | činí % |
|---|---|
| do 10 | 25,- |
| nad 10 do 15 | 25,- + 3,- à |
| nad 15 do 20 | 40,- + 2,- à |
| nad 20 do 25 | 50,- + 1,5 à |
| nad 25 do 30 | 57,5 + 1,- à |
| nad 30 do 35 | 62,5 + 0,8 à |
| nad 35 do 40 | 66,5 + 0,6 à |
| nad 40 do 45 | 69,5 + 0,5 à |
| nad 45 do 50 | 72,- + 0,4 à |
| nad 50 do 55 | 74,- + 0,2 à |
| nad 55 | 75,- |
(2) Profitability is calculated as the ratio of the balance sheet profit increased by the allowance referred to in Article 5 (1) (a) to the sum of the balance sheet profit and wages settled for payment, including other personnel costs, to the nearest hundredth.
(3) The factor "à" is equal to the percentage of profitability exceeding the lower limit of the relevant tax zone with a precision of one hundredth.
(4) The calculated profit tax is reduced by the discounts set out in Section 22.
(5) If the basis of the profit tax is the liquidation surplus, the tax rate shall be 50% of that surplus.
(6) For law firms, the rate of profit tax is 75%.
(1) Fees with activities mainly non-commercial, with the exception referred to in paragraph 2, pay a social security contribution of 20% on the basis of Article 10 (2).
(2) The social security contribution of 10% of the basis referred to in Article 10 (2) shall be paid by the research institutes of cooperatives, the cooperatives of disabled persons and the undertakings of disabled persons and a set range of organisations with a predominantly non-commercial activity of part of the basis referred to in Article 10 (2), which shall account for the share of sales for selected activities (services).
The rate of profit tax for the organisations referred to in § 2 (2) (d) and (e) shall be 65% and for the organisations referred to in § 2 (2) (c) 50% of the base referred to in § 4.
Other taxpayers
(1) The rate of profit tax on the Directorates-General, Cooperative associations, associations of organisations and the Central Board of Cooperatives is 50%.
(2) The taxpayers referred to in paragraph 1 shall pay a social security allowance of 10% on the basis referred to in Article 10 (2).
(1) For the taxpayers referred to in Paragraph 2 (1) (g), the rate of the profit tax is 65%.
(2) For the taxpayers referred to in Paragraph 2 (1) (h), the rate of the profit tax is:
(a) 40% of the base referred to in Article 4 (8) (a);
(b) 25% of the base referred to in Article 4 (8) (b);
(c) 20% of the base referred to in Article 4 (8) (c);
(d) 60% of the base referred to in Articles 4 (8) (d) and (e), as appropriate.
Common provisions
Income Tax Discounts
(1) If the profit tax base does not exceed 80 000 CZK, the rate of the profit tax is 20% (including the premium referred to in Article 11 (4) and the increase referred to in Article 17 (4)) for all taxpayers if it is more favourable to them.
(2) A tax credit is granted to taxpayers on the profits of apprentices in the Czech Republic as follows:
| pro preferované činnosti | pro ostatní činnosti | |
|---|---|---|
| ročně Kč | ||
| na každého učně v 1. roce výuky | ||
| při internátní výuce mimo podnik | 5 000 | 3 000 |
| při soustředěné výuce v podniku | 3 000 | 2 000 |
| při individuální výuce | 2 000 | 1 000 |
| na každého učně v 2. roce výuky (při tříleté učební době) | ||
| při internátní výuce mimo podnik | 3 000 | 2 000 |
| při soustředěné výuce v podniku | 2 000 | 1 500 |
| při individuální výuce | 1 500 | 1 000. |
(3) For disability cooperatives or disabled enterprises and social organisations (their enterprises and economic establishments), the profit tax shall be reduced by 30%. This provision shall not apply in the cases referred to in paragraph 1.
(4) For a selected range of taxpayers with a predominantly non-commercial activity, except for social organisations (their businesses and economic establishments), the profit tax on the sales of selected activities (services) is reduced by 40%. for year-on-year growth in sales for selected activities (services), the percentage of the profit tax rebate is increased up to 70%.
Administration of pension and social security contributions
(1) Pension tax ("tax"), the proceeds of which are:
(a) to the budget of national committees, the authorities responsible for the central authorities of the Republics shall be responsible for: *)
(b) to the State Budget of the Federation, carry out financial administrations. * *)
(2) The management of the social security contribution is carried out by the tax authorities.
Establishment of tax and social security contributions
(1) The tax and social security contributions are payable on the day of the start of the activity.
(2) In the case of the taxpayers referred to in Article 2 (1) (h), the tax shall be incurred on the date on which they began to carry out their economic activities in the country or, where appropriate, on which they are paid or credited with the income of the taxable person.
(3) The taxpayer shall notify the competent authorities managing the tax and social security contributions within 15 days of the start and termination of the activity.
Tax period
The tax period shall be the normal calendar year.
Tax return
(1) The taxpayer is obliged to submit a return on tax and social security contributions to the tax authority (§ 23), in whose territory he was established on 31 December of the tax period, before 15 February following the end of the tax period (§ 25) and to attach to it the accounts and other documents set out by the competent Ministry of Finance.
(2) The taxpayer is obliged to calculate the tax and social security contributions in his / her return and to specify any exceptions, advantages and discounts and to quantify their amount in crowns.
(3) If the organisation does not carry out the liquidation, its successor shall be obliged to submit a tax return and social security contribution for the preceding part of the year by the end of the following month.
(4) In the event of liquidation, the tax liability and the obligation to submit annual returns and social security contributions shall continue until the end of the liquidation. On completion of the liquidation, the body responsible for the liquidation shall submit by the end of the following month a declaration for the preceding part of the year and indicate the surplus in the profit tax return. The confession must be supported by an initial and final liquidation balance and a statement of the use of the liquidation surplus. The liquidation surplus shall be added to the profit tax base of the year in which the liquidation was completed.
(5) If the declaration has not been submitted in time, the tax charged and the social security contribution may be increased by up to 10%.
Measurement of tax and social security contributions
(1) The tax and social security contribution shall be determined by the managing authority and the social security contribution at the end of the tax period.
(2) The tax shall not be measured if it is less than 100 CZK.
(3) The basis of the tax and the basis of the social security contribution are rounded up to 100 CZK; the tax, the increase (Paragraph 26 (5)) and the periodic penalty payments shall be rounded up to the whole crown.
(1) The authority managing the tax and the social security contribution shall inform the taxpayer of the assessment of the tax and social security contributions by means of payment.
(2) The payer may appeal the payment notice to the authority which issued the payment notice within 15 days.
(3) The appeal does not have suspensory effect.
Payment of tax and social security contributions
(1) The taxpayer shall pay monthly advances on the profit tax not later than the third day before the end of each month as follows:
(a) in January, one twelfth of the planned annual tax obligation;
(b) starting from February, the amount of the advance shall be calculated on the balance sheet profit actually achieved in the preceding month. If the advance thus calculated for the current month is higher than or below the advance payable in the previous month, the taxpayer shall account for the difference in payment of the advance for the current month;
(c) after the end of each quarter (except for the last quarter), the taxpayer shall calculate the amount of the profit tax calculated on the basis of the actual achieved over the period starting from the beginning of the year. The difference by which the calculated tax liability is higher or lower than the sum of the advance payable on the profit tax shall be settled by the taxpayer with a monthly advance on that tax in the first month of the following quarter. At the request of the payer, the excess payment may be settled on social security contributions or its arrears, or may be refunded;
(d) at the rate of one twelfth of the planned annual tax liability if it is not obliged to submit a statement of profit or loss monthly. After each quarter (except for the last quarter), the procedure laid down in (c) shall be followed.
Advances will be rounded down to thousands.
(2) If the profit tax for the previous calendar year was:
(a) 100 000 Kčs to 400 000 Kčs, the advance on the profit tax shall be paid only on a quarterly basis, on the basis of the actual amount achieved from the beginning of the year after deduction of advances already due. Advances shall be payable (except for the last quarter) no later than the third day before the end of the first month following the end of the quarter;
(b) less than 100 000 CZK, no advance on the profit tax shall be paid. The year-round tax obligation shall be offset by the taxpayer within the time limit for submitting the VAT return.
(3) The social security contribution calculated by the payer himself shall be payable in monthly advances no later than the third day before the end of each month, at the latest, at the rate of one twelfth of the annual obligation calculated from the amount of the wage resources planned for the year in question and, for taxpayers with a different amount of the contribution by type of activity and their planned composition. At the end of each quarter, the amount of the social security contribution shall be adjusted according to the actual amount of wage resources in the past period and, for taxpayers, with a difference in the amount of the contribution according to the sales actually made in each type of activity. If the social security contribution thus calculated is higher than the advances paid, the taxpayer shall pay the difference for the first to third quarters with the advance due in the first month of the following quarter and for the fourth quarter within the time limit set for the submission of the VAT return and the social security contribution. If, firstly, the third quarter is overpaid, the taxpayer pays less for this difference at the earliest advance on the social security contribution.
(4) The taxpayer shall submit to the tax administration and the management of the social security contribution no later than 29 January the calculation of the planned annual tax and social security obligations.
(5) Where the tax and social security contributions calculated in the return are higher than the advance payments paid on the tax and on the social security contribution, the taxpayer shall be obliged to pay the difference within the time limit set for the submission of the return. If the advances paid on tax and social security contributions are higher than the tax and social security contributions calculated in the return, the excess payment for the past tax period shall be charged on the advance payment and the social security contribution in the current year or shall be paid back to the taxpayer upon request.
(6) Where the tax and social security allowance provided for in the payment order are higher than the tax and the social security allowance calculated in the return, the taxpayer shall pay the difference within 15 days of receipt of the payment notice.
(7) The authority managing the tax and social security contributions may provide otherwise for advances to taxpayers.
(8) The provisions on the enforcement of decisions in tax proceedings *) apply to all taxpayers of this tax and social security contributions. it shall apply mutatis mutandis to the payment of amounts due from accounts of other cash institutions.
(1) The tax on income income referred to in Article 4 (8) (a), (b) and (c), which are liable to be paid by foreign-based taxpayers, is collected by a deduction. The reduction shall be carried out by a debtor who has his domicile or head office in the country (hereinafter referred to as the debtor) at the amount specified in § 21 (2) (a), (b) and (c).
(2) The debtor is obliged to pay the withholding tax on the profits to the competent authority of the tax administration no later than 15 days after the date on which the taxpayer (s) pays or attributes the amounts due to the benefit, and at the same time notify the competent authority of the tax administration of the amount paid or credited to the taxpayer (s) and the legal reason for its obligation.
(3) If the debtor fails to make a profit tax deduction or does not pay the tax deducted, it shall be enforced as a debt.
(4) The taxpayer's tax liability in respect of the revenue referred to in Article 4 (8) (a), (b) and (c) shall be deemed to have been met by the deduction of the tax on profits.
(5) In other cases, the Federal Ministry of Finance may also provide that the tax on profits payable by foreign-based taxpayers is to be levied by deduction if it is in the interest of securing the tax while determining the amount of the tax deduction.
Penalties
(1) If the tax or social security contribution or advances were not paid on time, the taxpayer shall pay a penalty payment of 0,1% of the amount due for each day of delay. A penalty of the same amount is also payable by the debtor unless he has paid the tax levied in due time (§ 30).
(2) If the taxpayer indicates in the granting of a tax or social security contribution a lower amount than that fixed by the payment scale, the managing authority and the social security contribution shall increase the tax or contribution by 10% of that difference.
Limitation
(1) The tax and social security contribution cannot be assessed or enforced after three years from the end of the calendar year in which the taxpayer was obliged to submit the return and the social security contribution.
(2) Where an act is carried out to measure or enforce the tax or to recover the social security contribution, the limitation period shall run again from the end of the year in which the taxpayer was informed of the act.
Tax and social security checks
(1) The managing authority and the social security contribution shall examine the accuracy and completeness of the tax returns and the timeliness, accuracy and completeness of the payment of the tax and the social security contribution.
(2) The taxpayers, where appropriate, who are obliged to deduct the tax on profits (Section 30 (1)) are obliged to provide the supervisory authorities with explanations and evidence of the facts relevant for the assessment of the tax and social security contributions and to do whatever is necessary to facilitate and accelerate the control.
Management
(1) (*) Save as otherwise provided in this law.
(2) The tax authority may otherwise provide for a notification period (§ 24 (3)), a tax period (§ 25) and a derogation for the submission of a tax return (§ 26 (1)) to the taxpayers referred to in § 2 (1) (h).
Implementing rules, exemptions and concessions
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Regulation Information
| Citation | Act No. 113 / 1971 Coll., on Pension Tax and Social Security Contribution |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 20.10.1971 |
|---|---|
| Effective from | 01.01.1972 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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