Full text of Act No. 350 / 2004 Coll.
Full version of Act No. 72 / 2000 Coll., on investment incentives and on the amendment of certain laws (Act on investment incentives), as seen from later amendments
Valid
Declared full text
Text versions:
07.06.2004
350
PRESIDENT OF THE GOVERNMENT
Announces
full text of Act No. 72 / 2000 Coll., on Investment Incentives and on the amendment of certain laws (Act on Investment Incentives), as follows from amendments made by Act No. 453 / 2001 Coll., Act No. 320 / 2002 Coll. and Act No. 19 / 2004 Coll.
THE LAW
on investment incentives
Parliament has decided on this law of the Czech Republic:
INVESTMENT OBJECTIVES
(1) This Act regulates the general conditions for the provision of investment incentives, the procedure for providing investment incentives and the exercise of state administration related to this in order to promote economic development and job creation in the Czech Republic.
(2) Investment incentives means:
(a) discounts on income taxes under special legislation, 1)
(b) the transfer of the technically equipped territory at a favourable price;
(c) material support for the creation of new jobs under specific legislation, 3)
(d) material support for retraining or training of staff under special legislation, 3)
(e) the transfer of land under special legislation, (2) registered in the real estate register (2a) as agricultural parcels and the transfer of other types of land at prices established under special legislation (2b) effective at the date of conclusion of the transfer contract. This is without prejudice to specific laws restricting transfers of land owned by the Czech Republic.
(1) An investment incentive may be provided to a legal or natural person if he proves that he can meet the general conditions laid down by this law and the special conditions laid down by special legislation.1), 3)
(2) The general conditions are:
(a) the introduction of new production, the extension of existing production, or its modernisation in order to substantially change the product or production process;
(b) the use of funds in the industries of the manufacturing industry, provided that part of the production line is part of the machinery provided for by the Government Regulation and that the purchase price of that part of the production line is at least 50% of the total purchase price of the production line; the production and distribution of electricity, gas and water, construction, repair of motor vehicles, trade and other services, transport and agriculture are not regarded as the manufacturing industry;
(c) the acquisition of machinery (4) with a value of at least 40% of the total value of the assets acquired, which, under the special legislature (4a), is permanent tangible and intangible assets (hereinafter referred to as "tangible and intangible assets");
(d) friendliness of production, activities, processes, construction or equipment, 5)
(e) acquisition of fixed tangible and intangible assets of at least CZK 200,000 000, and at least CZK 100,000 000 must be covered by the equity capital of the legal person or by the natural person's own funds; This condition is not considered to be met by the use of investment funds generated by the profit obtained from an investment action assessed for the purpose of granting public aid;
(f) compliance with the conditions set out in points (a) to (c) and (e) within 3 years of the decision on the promise referred to in Article 5; in justified cases, the Ministry of Industry and Trade (hereinafter referred to as "the Ministry") may, upon request, extend this period for a maximum of 2 years,
(g) the acquisition of fixed tangible and intangible assets under an investment project may be possible at the earliest from the date of submission of the project to obtain investment incentives.
(3) The amounts referred to in paragraph 2 (e) and (f) do not include payments under a delegation contract in which the parties to the contract agree that the user is entitled to purchase the item.
(4) Where the intention to obtain investment incentives implies that the entire investment action should be carried out in the administrative district of the municipality with the entrusted municipal authority or in the administrative districts of the municipalities with the entrusted municipal authority in the district or districts where the unemployment rate is at least 25% higher than the average unemployment rate in the Czech Republic, as indicated in the statistics of the Ministry of Labour and Social Affairs for the past two half-years, the Ministry shall reduce the amount referred to in paragraph 2 (e) to CZK 150 000; half of this amount shall be covered by the equity of a legal person or by the natural person's own funds. This condition shall not be considered to be met if the investment funds are spent on the profits obtained from an investment action assessed for the purpose of granting public aid.
(5) If the intention to obtain investment incentives results in the entire investment action being carried out in the administrative district of the municipality with the entrusted municipal office or in the administrative districts of the municipalities with the entrusted municipal office, in the district or in the districts where the unemployment rate is at least 50% higher than the average unemployment rate in the Czech Republic, as indicated in the statistics of the Ministry of Labour and Social Affairs for the past two months, the Ministry shall reduce the amount referred to in paragraph 2 (e) to CZK 100 000 000; half of this amount shall be covered by the equity of a legal person or by the natural person's own funds. This condition shall not be considered to be met if the investment funds are spent on the profits obtained from an investment action assessed for the purpose of granting public aid.
(1) The applicant shall submit an intention to obtain investment incentives under Section 1 (2) to an organisation set up by the Ministry (hereinafter referred to as "designated organisations").
(2) The applicant shall indicate in its intention:
(a) if the legal person, business name or name, registered office, identification number is assigned, name, residence and birth number or other identification of the person who is the statutory authority or member of the statutory body of the legal person, indicating the extent to which he may act on his behalf; for the organisational component of the foreign enterprise, its location and the name and place of residence of the head of that branch;
(b) if the natural person is the name, place of residence, date of birth, birth number and identification number, if assigned to him;
(c) the planned amount of funds for the acquisition of fixed tangible and intangible assets at the time of the investment operation, broken down into years and in terms of the purpose of their use;
(d) the estimated initial and final status of the staff members, the requirements for their professional qualifications and the estimated amount of their retraining costs;
(e) the designation of the cadastral territory where the company will be established and the area where the machinery will be built and located;
(f) the requirements for technical equipment of the territory and the required area in m2, broken down into land intended for the construction of production facilities, storage facilities, administrative buildings and others;
(g) machinery intended for an investment action, broken down by tariff code number, further broken down into new machinery, machinery already used in the Czech Republic or outside the Czech Republic, including the date of its manufacture;
(h) details of the envisaged construction of new buildings or the expected use of the possibility of renting or purchasing existing buildings;
(i) the schedule of the investment action and the estimated start-up date;
(j) the required investment incentives;
(k) other information listed in the Annex to the Act.
(3) The applicant shall attach to the project,
(a) if a legal person, a social or other founding contract or a company's charter or an officially certified copy thereof, in the case of a public limited liability company, a cooperative or a limited liability company, the statutes shall, if they have them, an extract from the commercial register, a document similar to an extract from the commercial register, an annual report or financial statements or consolidated accounts, provided that the applicant is required to draw them up in accordance with a specific law, certified by the auditor for the last three consecutive financial years or for 1 or 2 financial years, if the legal person has undertaken for less than 3 years;
(b) if the natural person is a natural person, evidence of a business authorisation, if the natural person is registered, an extract from the business register, financial statements, or if the entity accounts in a simple accounting system, a statement of assets and liabilities, and of revenue and expenditure for the last three consecutive financial years, or for 1 or 2 tax years, if it has been in business for less than 3 years.
(1) The designated organisation shall, for the submitted project, draw up the investment incentives referred to in Article 1 (2) and submit them together with the applicant's intention to the Ministry within 30 days of receipt of the project. If the assessment indicates that the applicant can meet the general and specific conditions for providing investment incentives, the opinion shall include a proposal to provide the relevant investment incentives; the proposal shall specify which investment incentives could be provided, their amount and the conditions for their application. Otherwise, the opinion shall be accompanied by a proposal to reject the applicant's intention.
(2) The Ministry of Labour and Social Affairs and the Ministry of Finance, each in its jurisdiction, shall, at the request of the Ministry, give its consent or refuse to grant investment incentives within 14 days of receipt of the request. The Ministry of the Environment shall, within 14 days of receipt of the Ministry's request, comment on the conditions for compliance with the general condition laid down in Article 2 (2) (d). The municipality in whose cadastral territory the construction and installation of machinery will take place shall, at the request of the Ministry, respond to the investment incentive provided for in Article 1 (2) (b) within 14 days of receipt of the request.
(3) Following the assessment of the documents referred to in paragraph 1, the Ministry of Finance's prior approval to provide an investment incentive pursuant to § 1 (2) (a), the Ministry of Labour and Social Affairs's prior approval to provide investment incentives pursuant to § 1 (2) (c) and (d), on the basis of the opinion of the Ministry of the Environment to meet the general condition of § 2 (2) (d) and on the basis of the prior agreement of the Ministry of Labour and Social Affairs to provide investment incentives pursuant to § 1 (2) (d), it shall determine, in cooperation with the Public Competition Authority (hereinafter "the Authority"), the level and value of public support and issue of investment incentives broken down into different types of incentives, their values expressed as indicative, including the conditions under which the investment incentive can be taken, or the decision rejecting the project. The Ministry shall, through the designated organisation, send a copy of the offer to the ministries which have expressed their views on the application to the applicant for investment incentives or decisions it rejects.
(1) On the basis of the offer referred to in Article 4 (3), the interested investment incentives may submit a request to the Ministry through the designated organisation no later than 6 months after its delivery for the commitment of investment incentives. The interested party may be the person (s) who submitted the intention to obtain investment incentives or another person, but only on condition that it demonstrates, at the same time as the application, that:
(a) has been established in connection with the acceptance of an offer pursuant to Article 4 (3) and that the person or persons who submitted an intention to obtain investment incentives have a 100% participation in the newly created legal entity; or
(b) it has been established in connection with the acceptance of an offer pursuant to Article 4 (3) by a subsidiary of the person who submitted an intention to obtain investment incentives and that that subsidiary has a 100% shareholding in the newly created legal entity.
(2) An application submitted by an interested investment incentive must contain:
(a) an extract from the commercial register, and where a natural person not registered in the commercial register is interested in investment incentives, a proof of a business authorisation;
(b) confirmation by the applicant of the investment incentives on the veracity of the information provided in the project pursuant to Article 3 (2);
(c) the consent of the interested party to the investment incentives indicated in the tender;
(d) a statement by the interested party that, no later than 24 months after the receipt of the decision on the promise of investment incentives, the financing of the investment project shall commence by the use of funds for the acquisition of tangible or intangible assets and that the production shall commence no later than 3 years after receipt of the decision on the promise of investment incentives.
(3) The decision on the promise of investment incentives is issued by the Ministry to the interested party on the basis of the prior approval of the Ministry of Finance, if the incentives referred to in § 1 (2) (a), on the basis of the prior consent of the Ministry of Labour and Social Affairs, if the incentives referred to in § 1 (2) (c) and (d) and on the basis of the prior observations of the municipality in whose territory the investment is to be made, if the incentive referred to in § 1 (2) (b). A copy of the decision shall be sent to the Ministry of Finance, the Ministry of Labour and Social Affairs, the locally competent tax administrator and the municipality in whose cadastral territory the investment is to be carried out, taking into account the application of the investment incentive provided for in Article 1 (2) (b).
(4) The decision to promise investment incentives shall specify:
(a) an indication of the applicant for investment incentives;
(b) the types of investment incentives awarded;
(c) the conditions under which investment incentives may be drawn;
(d) the permissible rate and value of public support determined by the Ministry in cooperation with the Office; and
(e) the conditions under which public aid is granted.
(5) Where the payment of the amounts for the acquisition of tangible and intangible assets referred to in Article 2 (2) is not initiated within 24 months of the date of receipt of the decision on the promise of investment incentives, or where the production is not started no later than 3 years from the date of receipt of the decision on the promise of investment incentives, without the extension of the period referred to in Article 2 (2) (f), the decision on the promise of investment incentives shall cease to be valid and all that has been obtained by means of the investment incentive shall be repaid or withdrawn, including the relevant penalty or other penalties (6) under specific legislation. The same applies if it is found during the verification that the general conditions laid down in Section 2 are not met. If specific conditions are found not to be met, the procedure shall be followed in accordance with the special legislation 1), 3)
(1) The public aid intensity shall be the proportion of the amount of public aid granted in the form of investment incentives, with the exception of the investment incentive provided for in Article 1 (2) (d), to the costs that may be supported, expressed as a percentage.
(2) The permissible value of public aid shall be the absolute amount calculated from the expected costs which may be supported, as set out in the project referred to in Article 3, taking into account the permissible level of public aid.
(3) The permissible rates of public aid in individual regionech8) of the Czech Republic, which cannot be exceeded, are laid down in implementing legislation.
(4) Sectors in which investment incentives cannot be granted shall lay down implementing legislation.
(1) The costs which may be supported relate to an investment action assessed for the purpose of providing investment incentives and are composed of:
(a) fixed assets in the form of land, buildings and machinery; and
(b) a long-term intangible asset of up to 25% of the value of the long-term tangible assets referred to in (a), in the form of licences or know-how, provided that it is purchased under market conditions from persons other than economic or personnel-related persons (8a) and is used exclusively by an interested party at a production site supported by investment incentives.
(2) The beneficiary of the public aid in the form of an investment incentive ("the beneficiary of the investment incentive ') pursuant to Article 1 (2) is obliged to maintain the long-term tangible assets and the long-term intangible assets for which the public aid was granted by means of investment incentives,
(a) to the extent appropriate to the actual amount of aid received, but not less than the amount referred to in Article 2 (2) (e) or, where applicable, Article 2 (4) and (5); and
(b) in a composition corresponding to compliance with the conditions laid down in Article 2 (2) (a), (b) and (c);
for the period of application of the investment incentive referred to in Article 1 (2) (a), but for at least five tax periods following the tax period when the interested party has fulfilled the general conditions laid down in Article 2 (2).
(3) The beneficiary of the investment incentive referred to in Article 1 (2) (c) shall maintain the number of newly created jobs and the occupation of such posts by staff with a fixed weekly working time, 8b) to whom the investment incentive referred to in Article 1 (2) (c) will be received, for at least 5 years from the date of first drawing of the investment incentive referred to in Article 1 (2) (c).
(4) The investment action assessed for the purpose of granting public aid must be carried out in such a way that at least 25% of the total value of the investment must be financed by means in which no element of public aid is included.
(5) The costs referred to in paragraph 1 shall not include fixed assets and fixed assets for which public aid has already been granted, irrespective of the sources from which it is granted. The control of the excess of the permissible rate and the value of the public aid shall be carried out by the Ministry on an ongoing basis during the period of drawing on investment incentives.
(6) The beneficiary of an investment incentive which has not been granted an investment incentive pursuant to Article 1 (2) (a) shall inform the Ministry in writing, no later than 30 days after the granting of public aid other than under this Act, for an investment action assessed for the purpose of providing investment incentives. In the event of failure to comply with this obligation, the permissible value of the public aid referred to in Article 4 (3) shall be reduced by the value of the public aid granted, which was not notified by the Ministry to the interested party.
(7) In the case of an investment incentive under Article 1 (2) (b) in the event of non-compliance with the condition referred to in paragraph 2 or in the case of non-compliance with the general conditions under Article 2 (2), the investment incentive shall cease to be valid. In this case, the beneficiary of this investment incentive must pay the value of the public aid thus granted to the party who transferred the technically equipped area to the beneficiary of that investment incentive, including a penalty of 5% of the amount of the public aid thus granted for each year ending after the decision on the promise of investment incentives has been taken.
(8) In the event of failure to comply with the conditions referred to in paragraph 2, the effects referred to in Article 5 (5) shall take place. In the event of non-compliance with the condition referred to in paragraph 3, the decision on the promise of investment incentives in the part concerning the granting of an investment incentive under Article 1 (2) (c) shall cease to be valid and all that has been obtained by the investment incentive under Article 1 (2) (c) shall be recovered under specific legislation. (c)
(1) Specific legislation shall apply in order to check the application of investment incentives and to establish consequences for the breach of the conditions under which investment incentives have been provided. The competent administrative authorities shall cooperate in the control and shall provide each other with the information necessary to carry out the control; they shall comply with the provisions governing confidentiality.
(2) The beneficiary of investment incentives shall be obliged to allow for the control of the fulfilment of general and specific conditions as well as the decision to grant investment incentives. To that end, it shall submit the documents and documents necessary to assess their fulfilment.
(3) It is for the control to be carried out
(a) to the Ministry for investment incentives referred to in § 1 (2) (b) and (e), and for the general conditions referred to in § 2 (2) (a) and (b), and for the obligation referred to in § 6a (2), with the exception of checking the condition under § 2 (2) (c);
(b) the Ministry of the Environment for the general condition referred to in § 2 (2) (d),
(c) the Ministry of Labour and Social Affairs for the investment incentives referred to in § 1 (2) (c) and (d) and locally to the competent employment office for the condition set out in § 6a (3);
(d) to the Ministry of Finance and Territorial Financial Institutions for the investment incentive referred to in § 1 (2) (a) and for the general conditions referred to in § 2 (2) (c), (e), (f) and (g) and the condition set out in § 6a (4).
(4) The checks referred to in paragraph 3 (a) and (d) must be carried out by the competent authorities not later than 3 years after the decision on the commitment referred to in Article 5, except for checking compliance with the condition set out in Article 6a (4).
(5) A further check of compliance with the general condition referred to in Article 2 (2) (b) shall be carried out annually for the period of the first application of the investment incentive referred to in Article 1 (2) (a), (c) and (e), together with a check of compliance with the condition referred to in Article 6a (4), shall be carried out five years after the date of first application of the investment incentive referred to in Article 1 (2) (a), or, if the investment incentive referred to in Article 1 (2) (a) is not applied, in the year following its last application but no later than 5 years after the end of the first drawing of the investment incentive referred to in Article 1 (2 (c).
(6) The checks referred to in paragraph 3 (b) shall be carried out in accordance with specific environmental legislation. 9)
(7) The control of investment incentives referred to in Sections 1 (2) (c) and (d) shall be carried out after the expiry of the time limit specified in the written agreement concluded under the special legislature10) and the check of compliance referred to in Section 6a (3) shall be carried out five years after the date of first drawing of the investment incentive referred to in Section 1 (2) (c).
(1) Decisions under this Act shall be taken according to the Administrative Rules, (11) unless otherwise provided for in this Act.
(2) Decisions given under Paragraph 5 (3) shall not be subject to appeal or judicial review.
Common and transitional provisions
repealed
(1) Investment incentives granted before the entry into force of this Act remain in force under the conditions and to the extent that they are provided.
(2) The decision on the promise of investment incentives does not replace the decision, opinion, observations, consent, assessment or other measures of the authorities concerned required by the specific legislation.
Empowerment
(1) The Government shall, by regulation, establish the list of machinery referred to in Article 2 (2) (b) (2).
(2) By decree, the Ministry sets out a model form for the application of the intention to obtain investment incentives.
(3) The Government will issue a Decree implementing Article 6 (3).
(4) The Ministry will issue a decree implementing Section 6 (4).
EFFECTIVE
That law shall take effect on the first day of the calendar month following its publication.
* * *
Act No. 453 / 2001 Coll., amending Act No. 72 / 2000 Coll., on Investment Incentives and amending certain laws (Investment Incentives Act), Act No. 586 / 1992 Coll., on Income Taxes, as amended, and Act No. 9 / 1991 Coll., on Employment and Jurisdiction of the Bodies of the Czech Republic on the Employment Sector, as amended, became effective on the 30th day following the date of its publication (30 January 2002).
Act No. 320 / 2002 Coll., on the amendment and repeal of certain laws in connection with the closure of the activities of the district authorities, became effective on 1 January 2003.
Act No. 19 / 2004 Coll., amending Act No. 72 / 2000 Coll., on Investment Incentives and on the Amendment of Certain Acts (Act on Investment Incentives), as amended, and some other laws, became effective on the date of entry into force of the Treaty of Accession of the Czech Republic to the European Union (1 May 2004).
Prime Minister:
PhDr. Špidla v. r.
1) Sections 35a and 35b of Act No. 586 / 1992 Coll., on Income Tax, as amended by Act No. 72 / 2000 Coll.
2) Article 17 (3) of Act No. 229 / 1991 Coll., on the treatment of property relations with land and other agricultural property, as amended by Act No. 183 / 1993 Coll.
2a) § 2 (3) of Act No. 344 / 1992 Coll., on the cadastral property of the Czech Republic (cadastral law), as amended.
2b) § 11 of Act No 151 / 1997 Coll., on the valuation of assets and on the amendment of certain laws (Law on the valuation of assets).
3) Act No. 9 / 1991 Coll., on Employment and Jurisdiction of the Bodies of the Czech Republic on Employment, as amended.
4) Chapters 84, 85 and 90 of the Decree of the Government No 318 / 1999 Coll., on the issue of a tariff and fixing the rates of import duty for goods originating in developing and least developed countries and the conditions for their application (tariff rate rate).
4a) Act No. 563 / 1991 Coll., on Accounting, as amended.
5) For example, Act No. 309 / 1991 Coll., on the Protection of Air from Pollutants (Air Act), as amended, Act No. 334 / 1992 Coll., on the Protection of the Agricultural Soil Fund, as amended, Act No. 114 / 1992 Coll., on the Protection of Nature and Landscape, as amended, Act No. 254 / 2001 Coll., on Water and on the Amendment of Certain Laws (Water Act), Act No. 185 / 2001 Coll., on Waste and on the Amendment of Certain Other Laws, Act No. 157 / 1998 Coll., on Chemicals and Chemical Products and on the Amendment of Certain Other Laws, as amended.
6) For example, Act No. 586 / 1992 Coll., on Income Tax, as amended, Act No. 9 / 1999 Coll., on Employment and Jurisdiction of the Bodies of the Czech Republic on Employment, as amended.
8) Article 15 of Act No. 248 / 2000 Coll., on the promotion of regional development.
8 (a) Paragraph 23 (7) of Act No. 586 / 1992 Coll., as amended.
8b) § 83a of the Labour Code.
8c) For example, Act No. 218 / 2000 Coll., on budgetary rules and amending certain related laws (budgetary rules), as amended.
9) For example Act No. 309 / 1991 Coll., on the Protection of Air from Pollutants (Air Act), as amended, Act No. 254 / 2001 Coll., on Water and on the Amendment of Certain Laws (Water Act), Act No. 185 / 2001 Coll., on Waste and on the Amendment of Certain Other Laws.
10) Articles 5a (2) and 6a (2) of Act No. 9 / 1991 Coll., as amended.
11) Act No. 71 / 1967 Coll., on Administrative Procedure (Administrative Regulations), as amended.
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Regulation Information
| Citation | Full text of Act No. 350 / 2004 Coll., Act No. 72 / 2000 Coll., on Investment Incentives and on the amendment of certain laws (Investment Incentives Act), as seen from subsequent amendments |
|---|---|
| Regulation Type | Declared full text |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 07.06.2004 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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