Act No. 133 / 1969 Coll.
Law laying down principles for the laws of national councils on corporate taxes and social security contributions
Valid
Effective from 10.12.1969
133
THE LAW
of 3 December 1969
laying down principles for the laws of national councils on corporate taxes and social security contributions
The Federal Assembly of the Czechoslovak Socialist Republic decided on this law:
Preliminary provisions
That law lays down principles for the laws of national councils on:
(a) corporate taxes on profits, capital tax and wage tax;
(b) social security contributions.
Taxpayers
(1) The taxpayers of profit tax and capital tax are:
(a) state economic organisations for which the volume of industrial or construction activities or the sum of such activities exceeds half of the total output;
(b) a branch (Directorate-General), provided that at least half of the subordinate organisations are subject to taxation under point (a);
(c) the organisation of external trade;
(d) domestic limited-liability companies;
(e) organisations formed under a contract of association *) if at least half of their founders or members are the organisations referred to in points (a) to (d).
(2) All State economic organisations, foreign trade organisations, domestic public limited companies and organisations referred to in paragraph 1 (e) shall be liable for the wage tax.
(3) Corporate tax payers are not organisations subject to pension tax * *), the pension part of the agricultural tax * * *) and organisations for which a special relationship to the state budget has been established in accordance with the current rules +) at the date of application of the law. Tax on profits and capital taxes are not subject to the Central Railway Administration organisations.
Income Tax
Tax base
(1) The basis of the profit tax is the balance sheet profit generated from all the activities of the taxpayer and from the management of all the assets reported in duly kept accounts, increased by the items to be added (hereinafter the "deductible items') and reduced by the items to be deducted (hereinafter the" deductible items'). 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.
(2) The balance profit consists of revenues from production activities, the transfer of products, works and services, the activation of investments, the activation of material, the sales of non-production activities, other revenues, as well as price increases (reductions) and subsidies increasing sales, changes in stocks and balances on accruals, minus shortcuts in sales and revenues (purchase prices of stocks sold, turnover taxes, sales of basic assets, etc.) and total costs including financial costs and compulsory contributions to state funds.
(3) Subsidies and price interventions are considered to increase sales. The sales also include subsidies, interventions and contributions granted on the basis of invoices.
(4) The detailed content of each component of profit-making within the meaning of paragraph 2 shall be laid down in the accounting rules uniformly for the entire Czechoslovak Socialist Republic.
Subordinated liabilities
The deductible items for profit are:
(a) items charged in the taxpayer's cost
1. contributions, provided that the taxpayer is not obliged by law, subsidies, gifts and other free of charge to pay them;
2. the creation or, where appropriate, the change in the stocks of reserves not complying with the legislation;
3. catering expenditure, for foreign trade organisations only catering expenses and gifts above the limit approved by the Government of the Czechoslovak Socialist Republic;
4. items whose cost, contrary to legislation, has been reduced by the balance sheet profit;
5. fines paid and periodic penalty payments;
6. the amounts charged to the refund for discharges of uncleaned or poorly cleaned waste water;
7. the fees charged, including the air pollution premium;
(b) repayments of capital tax and unpaid loss of catering;
(c) amounts received as part of the reallocation of funds in the coal industry due to different natural and positional conditions.
(d) non-taxed allocations to funds, shortening the production of profits and used for purposes for which the organisation's own funds may be used under the legislation;
(e) loyalty allowances to miners above or above the specified heading (*), amounts spent on protective clothing, footwear and equipment above the standards of the prescribed regulations or of the specified heading (s) of workers and the value of natural benefits beyond the regulations or of the specified heading of workers.
Deductible items
(1) The following items shall be deductible from profit unless they are legally charged in the cost or income formation of the taxpayer:
(a) the capital tax paid;
(b) land tax paid † †);
(c) compensation paid for the temporary withdrawal of agricultural land in geology;
(d) a contribution to the technical development fund set up by the Directorate-General for Trade;
(e) contribution to the Mines Damage and Compensation Fund;
(f) the contribution to the Geological Work Fund provided for by specific provisions.
(2) The deductible items are as follows:
(a) special-purpose export premiums where they are included in the profit;
(b) the profit from the catering;
(c) the fines and periodic penalty payments received and the amounts already taxed on profits or similar taxes on another taxpayer and the items already taxed on the same taxpayer if they are part of the profits;
(d) a contribution of up to 50% of the budget price for corporate housing according to the actual implementation of the construction in the current year and up to the same amount of the repayment of loans for corporate housing, drawn up until 31.12.1969;
(e) amounts granted in the framework of the reallocation of funds in the coal industry due to different natural and positional conditions;
(f) remuneration for the Red Government and the Central Council of the Czech Republic or for the banners, or for the standards, on a par with them if they are included in the profit.
Tax rate
The rate of profit tax is 65% of the tax base (Section 3), with the following derogations:
(a) 40% for organisations principally engaged in the production of building materials, in the production of structures or parts, and for food industry organisations (excluding organisations principally engaged in the manufacture of machinery or packaging);
(b) 50% for energy organisations involved in a single electricity system whose main activity is the generation or distribution of electricity or heat (excluding plant power plants);
(c) 60% for mining organisations whose main activity is the extraction or modification of solid fuels, or ores or the searching and extraction of nutrients, and for gas organisations principally engaged in the production, distribution or storage of heating gases;
(d) 85% for those cash institutions which are equity companies and have a general reserve fund set up at the level specified by the statutes.
For taxpayers who are resident in the country, income from foreign sources shall not be subject to profit tax if they have been taxed by similar tax abroad.
Capital tax
Tax base
The basis of the wealth tax is the taxpayer's wealth.
Charger's name
(1) The names of the taxpayer are:
(a) in the case of basic funds and investments not completed, the status of the fund of basic funds and investments and the status of the building fund;
(b) in the case of circulation funds, the state of the turnover fund and the state of all other funds of the organisation, except the fund of cultural and social needs, the fund of technical development, the fund of damages and compensation in mining and the fund of geological works, where the contribution to that fund is a deductible item for the profit tax [Paragraph 5 (1) (f)]; in the case of domestic equity companies, equity capital;
(c) retained earnings and provisions not complying with the legislation.
(2) The property of the taxpayer shall be deducted:
(a) residual price
1. the basic means used as separate establishments *) mainly for housing, health, rehabilitation, educational, cultural and physical purposes, for recreation of own employees (including pioneering recreation ROH) or for racing meals and accommodation;
2. separate basic means to improve the purity of water and air, to ensure safety or to protect the health of workers;
3. Basic appropriations used exclusively for civil defence purposes and specific tasks;
4. the basic means of preservation, intended for specific tasks;
5. public road transport;
6. the basic funds transferred to temporary use and used for the purposes referred to in Nos 1 to 3.
The residual price of the basic funds referred to in paragraphs 1 to 6 shall be deducted from the taxpayer's assets only at the level covered by the basic funds and investments;
(b) funds deposited in special accounts and bound by the Government's decisions (e.g. minimum reserve);
(c) the price of stocks of civil defence material and of stocks for specific tasks the storage of which has been specifically imposed on the taxpayer if they are covered by one of the farm funds;
(d) unpaid loss;
(e) the price of the land, if included in the basic funds.
Tax rate
The capital tax rate is 5% of the tax base; for permanent organisations, Czechoslovak seagoing, Brno fairs and exhibitions, and for organisations referred to in § 6 (b) and (c), the rate shall be 2%.
The average state of assets in the tax period is decisive for determining the tax liability.
If the taxpayer has a fortune abroad, he can deduct from the capital tax the amount of a similar tax on that property paid abroad.
Income tax
Tax base
The taxable amount of wages shall be based on the amount of all wages charged in the current year, including other personal expenses and profit and loss shares paid. The remuneration charged to the best workers and collectibles of the amount received by the organization as a reward to the Red Battalion of the Government and the Central Board of the Czech Republic shall not be included in the wage base. ROH or battalion, or standard equivalent.
Tax rate
(1) The rate of taxation on the wage volume is:
| při přírůstku průměrných mezd proti předchozímu roku v % | sazba daně v % z objemu mezd |
|---|---|
| od 0 do 3 | 0,5a |
| nad 3 do 5 | 1,5 + 1a |
| nad 5 do 7 | 3,5 + 1,5a |
| nad 7 do 10 | 6,5 + 3a |
| nad 10 | 15,5 + 6a, |
where the factor "a 'is equal to the percentage of the increase in average wages exceeding the lower limit of the relevant tax zone with a precision of one hundredth.
(2) The average wage of the current year is the share per worker, calculated from the wage volume (Paragraph 13), reduced by the wage charged for the productive work of apprentices and the actual average number of employees in the current year. The average wage of the previous year shall be determined in such a way as to maintain methodological and organisational comparability with the current year.
Social security contribution
Fees for profit tax and capital tax pay to the State budget a social security contribution of 25% of the volume in the current year of paid wages and other personal expenses and profit and loss shares. The remuneration to be paid under the second sentence of Section 13 (point 17) shall not be included in the basis for calculating the social security contribution. Social security contributions include sickness insurance *). The social security contribution is part of the taxpayer's costs.
Transitional provisions
The amount of the discount on the contribution from the basic funds granted or promised in connection with the authorisation of the subsidy for the development of less developed areas *) may be deducted from the capital tax until the end of the specified period, provided that the basic means serve the purpose with which the grant was granted.
Until the end of 1970, part of the price of the basic funds, which was paid out of those resources by the end of 1966 (for experimental enterprises as well as in 1965), shall be deducted from the capital tax base up to the amount of the gross income or profit allocation, or from the investment loan, which was paid out of those resources by the end of 1966.
Final provisions
Tax return and tax period
(1) The basis for establishing the tax base and the tax liability is the tax return in which the taxpayer is obliged to also provide any exemptions, advantages and discounts and quantify their volume.
(2) The tax period shall be the normal calendar year.
Limitation
(1) Taxes under this Act cannot be levied or enforced after three years from the end of the calendar year in which the taxpayer was obliged to submit the VAT return.
(2) The social security contribution shall not be recovered three years after the end of the calendar year in which the taxpayer was obliged to pay the contribution.
(3) 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.
(4) The contributions made pursuant to Act No. 83 / 1966 Coll., on the Fourth Five-Year Plan for the Development of the National Economy of the Czechoslovak Socialist Republic, and Act No. 131 / 1968 Coll., on the income and salary gains of which the obligation arose after 1.1.1971 cannot be enforced after three years from the end of the calendar year in which the obligation to pay arose.
(5) Where the recovery operation referred to in paragraph 4 is carried out, the provisions of paragraph 3 shall apply mutatis mutandis.
Exemptions, advantages and discounts
The powers of the authorities designated by the laws of the National Councils for taxpayers established in the respective Republic, with the exception of those governed by federal authorities, shall be:
(a) extend, for a profit tax, the heading of deductible items (Section 5), where appropriate, to modify or abolish some of the specified items, up to a maximum of 3% of the tax base of all taxpayers;
(b) fully exempt from the tax on profits and capital taxes of newly built enterprises for the planned period of construction, partly exempt from the tax on profits and capital taxes of enterprises which are substantially expanding, in particular by building new plants, for the planned period of construction;
(c) identify the places and sectors (sectors) or, where appropriate, individual organisations in which the wage tax will not affect wage increases resulting from employment growth;
(d) determine the conditions under which the increase in average wages resulting from employment reductions will not be taxed;
(e) reduce the rate of pay tax in each of the tax bands by a maximum of 1% in line with wage policy objectives and the need for differentiated rates of average wage growth in each sector and, where appropriate, organisations;
(f) in cases justified by specific conditions and economic effectiveness, to authorise the payment of corporate taxes by the Directorate-General or by a similar economic operator for the production unit as a whole, or to allow, as an experiment, to tax the profits and, where appropriate, the assets of the production unit as a whole, and to be liable to tax the profits or capital taxes for the whole production unit, to be the branch (general) Directorate-General or similar economic operator; Where such bodies have economic management of subordinate organisations in both Republics, agreements with the competent authorities of both Republics shall be required;
(g) approve in some selected organisations or branches the experimental examination of profit tax at the progressive tax rate determined according to the organisation's profitability and the approval of further methods of taxation of corporate wages;
(h) to authorise discounts on capital tax and profit tax on taxpayers operating in the public interest, for a profit tax of up to 35% of the differences between income and expenditure on that activity and for a capital tax of up to the amount of the tax payable on the actual capital which serves that activity.
(ch) lay down the conditions under which no surpluses for compensation for discharges of uncleaned or poorly cleaned waste water, as well as the charges and surpluses for air pollution shall be added to the profits for the purposes of calculating the profit tax;
(i) authorise, in the food industry sector, capital tax rebates up to the amount of this tax on that part of the value of stocks of selected product types covered by the turnover fund; the types of such products are specified by the Ministry of Finance in agreement with the Ministry of Agriculture and Nutrition.
The authorities designated by the laws of the national councils for taxpayers established in the respective Republic, with the exception of taxpayers managed by federal authorities, may:
(a) authorise discounts on capital tax and profit tax to taxpayers for which the total tax liability of those taxes will be more than 85% of the taxable amount of the profit tax not reduced by the capital tax, up to a maximum of 85% of that tax;
(b) decide, in the cases at issue, on the method of taxation; for organisations within the competence of federal authorities, the Ministry of Finance of the Czechoslovak Socialist Republic may decide;
(c) to determine the starting level of wages for the purposes of the wage amount tax
1. for newly created organisations and in cases of reorganisation;
2. in organisations, places or sectors (where applicable), if the Government of the Czech Socialist Republic or the Government of the Slovak Socialist Republic so decides;
(d) take measures to avoid double taxation of the same taxable amount for the same taxpayer;
(e) take measures to prevent hardness and irregularities on a case-by-case basis.
Exemptions, advantages and discounts for taxpayers under the jurisdiction of federal authorities under § 20 may be authorised by the Government of the Czechoslovak Socialist Republic and under § 21 of the Ministry of Finance of the CSSR in the cases referred to in § 21 (c) - in agreement with the Federal Ministry of Labour and Social Affairs.
(1) For taxpayers of profit tax and capital tax, the following shall not apply:
(a) the provisions of § 3 (2) (b), § 4, § 5 (1) to (3), § 6 to 8 and § 9 (1) and § 2 (a) of Act No. 83 / 1966 Coll., on the Fourth Five-Year Plan for the Development of the National Economy of the Czechoslovak Socialist Republic,
(b) Paragraph 4 and 5 of Act No 158 / 1968 Coll., on the State Budget for 1969 and on certain other financial measures;
(c) Paragraph 1 (1) (d) of Act No. 159 / 1968 Coll., on Pension Tax,
(d) part of the First Government Decree No 148 / 1968 Coll., on the implementation of income and wage increases and amending and supplementing Government Decree No 100 / 1966 Coll., on the planned management of the national economy,
(e) Paragraph 3 (6), second sentence, § 18 (1) (a) to (d) and § 2, § 20 to 25, § 40 (1) (c), § 41, § 45 (1), § 46 (c), § 47 (2) (a) to (d), § 49, § 50 (3), Article 64 (1) to (3), § 65 (a), (c) and (d) (as regards the relationship to § 59 (1) (b), § 66 (b), (c) and (e), § 67 and § 70 of Decree-Law No 100 / 1966 Coll., as amended by Decree No 83 / 1967 Coll., Decree No 16 / 1968 Coll.
(2) Section 6 to 9 of Act No. 131 / 1968 Coll., on income and wage increases, as far as the payment of salary increases is concerned, does not apply to the taxpayers of profit and capital tax.
They shall be deleted:
(a) the provisions of Sections 4 and 5 of Act No. 131 / 1968 Coll., on profit and wage gains;
(b) Paragraph 5 (1) of Act No 159 / 1968 Coll., on Pension Tax.
This Act shall take effect on the day of its publication.
Freedom v. r.
Dr. Hanes v. r.
Ing. Kempný v. r.
*) Paragraph 85 (6) of Decree No. 100 / 1966 Coll., on the planned management of the national economy.
* *) Act No. 159 / 1968 Coll., on Pension Tax.
* * *) Part of Act No. 112 / 1966 Coll., on Agricultural Tax.
†) § 68 of Decree No. 100 / 1966 Coll., on the planned management of the national economy.
† †) Act No. 112 / 1966 Coll., on Agricultural Tax.
*) i.e. equipment registered in accounting as separate inventory items.
*) Act No. 177 / 1968 Coll., on the loyalty of miners.
*) § 40 (1) (a) and (b) of Government Decree No. 100 / 1966 Coll., on the planned management of the national economy.
*) § 57 of Act No. 54 / 1956 Coll., on the sickness insurance of employees.
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Regulation Information
| Citation | Act No. 133 / 1969 Coll., laying down principles for the laws of national councils on corporate taxes and social security contributions |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 10.12.1969 |
|---|---|
| Effective from | 10.12.1969 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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