Full text of Act No. 89 / 2008 Coll.
Full text of Act No. 593 / 1992 Coll., on provisions for determining the income tax base, as resulting from subsequent amendments
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89
PRESIDENT OF THE GOVERNMENT
Declares the full text of Act No. 593 / 1992 Coll., on provisions for the determination of the income tax base, as follows from the amendments made by Act No. 157 / 1993 Coll., Act No. 323 / 1993 Coll., Act No. 244 / 1994 Coll., Act No. 132 / 1995 Coll., Act No. 211 / 1997 Coll., Act No. 333 / 1998 Coll., Act No. 363 / 1999 Coll., Act No. 492 / 2000 Coll., Act No. 126 / 2002 Coll., Act No. 260 / 2002 Coll., Act No. 176 / 2003 Coll., Act No. 438 / 2003 Coll., Act No. 669 / 2004 Coll., Act No. 377 / 2005 Coll., Act No. 545 / 2005 Coll., Act No. 223 / 2006 Coll., Act No. 223 / 2006 Coll.
THE LAW
on provisions for determining the income tax base
The Czech National Council decided on this law:
This law regulates, for the purposes of determining the income tax base, the way in which provisions are created and the amount of provisions and adjustments which are expenditure (costs) incurred to achieve, secure and maintain income (1) for income taxpayers.
(1) Reserves referred to in Article 1 are bank reserves, insurance reserves, provisions for the repair of tangible assets, provisions for cultivation and other provisions to the extent provided for by this law.
(2) The weightings referred to in Article 1 shall be those set out in this Act which are created at the balance sheet value of the outstanding claims payable after 31 December 1994 and entered in the accounts under the special legislative provision (1a) or those held in a demonstrable register pursuant to Article 3 (3). For the purposes of this Act, the balance sheet value of the claim shall be the nominal value or cost of the claim entered in the payer's balance sheet accounts without the effect of a change in the fair value (valuation difference) 1a) or held in a demonstrable account in accordance with § 3 (3). Unless expressly provided otherwise by this law, the adjustments may be made only in respect of claims which, at the time of their establishment, were recognised in income and thus income generated was not income exempt from income tax or not included in the income tax base or included in a separate income tax base or the tax base for a specific tax rate. Unless otherwise expressly provided by this Act, the adjustments shall not be made to claims arising from securities and other investment instruments (1b), loans, loans, guarantees, advances, claims for equity, remuneration of company losses, contractual fines and interest on late payments, late payment fees, periodic penalty payments and other penalties on obligations, claims acquired free of charge and on a set of claims.
(3) In the case of the acquisition of a claim by the transfer, the transferee may make up the adjustments to the balance sheet value of the claim if he has paid his purchase price.
(4) If the creditor does not comply with Sections 5 and 8, he may not form an adjustment to the claims if he has simultaneously payable liabilities to the debtor and does not make a reciprocal credit of claims and liabilities.
(5) In the event of a claim being called into question by a debtor's legal act, the provisions of paragraph 4 shall not apply to the creditor to that part of the value of the claims which exceeds the value of the liabilities of the debtor who is called into question, provided that the creditor follows the procedure laid down in Paragraph 8a (2) and the credit is made on the date of the final termination of the proceedings.
(1) Reserves and adjustments are made up in the manner and for the purposes laid down by this Act and are applied for a tax period, unless otherwise provided in other provisions. The tax period for the purposes of this Act shall be understood as the tax period defined in the Income Tax Act (1c), if it lasts for at least 12 calendar months or if it is less than 12 months but begins with the relevant date of merger or transfer of assets to a shareholder or division of a company or cooperative. The tax period for the purposes of this Act shall mean a calendar year for natural persons.
(2) The taxpayer is obliged, in connection with the filing of the tax return, to examine the justification for the creation of provisions and adjustments and to compare their actual situation with the amount which the taxpayer may apply under this law in the income tax base established under the special legislation 1d).
(3) The formation of adjustment appropriations and provisions used as expenditure (cost) for attaining, securing and maintaining income (1d) must always be accounted for in accordance with the special legislation1a) or entered in the tax records (20). The creation of weightings may also be used as a cost (cost) for attaining, securing and maintaining 1d's income by a taxpayer to whom a special legislature is provided) for the accounting and compilation of accounts of the International Accounting Standards governed by European Community law, provided that it simultaneously keeps a demonstrable record of claims, but not more than the amount set out in this demonstrable register, only in relation to claims with which the related income has not been explicitly provided for under the special legislature (1d) by income tax exempt income income or not included in the income tax base or included in a separate income tax base or tax base for a specific tax rate, unless otherwise expressly provided by this law. In this case, a demonstrable record of claims shall be understood as an inventory of individual claims and adjustments made to these individual claims under this law, drawn up in a manner and to the extent specified for the creation of weightings by special legislation1a) without the influence of the International Accounting Standards governed by European Community law. The creation of reserves may be used as an expense to achieve, secure and maintain income (1d) subject to compliance with the conditions of this Act by a taxpayer to whom a special legislature1a is provided) for the accounting and compilation of the accounts of the International Accounting Standards, as laid down by European Community law, provided that it also keeps a demonstrable record of such reserves up to a maximum of the amount laid down by this demonstrable record. In this case, a demonstrable record of the reserves shall be understood as an inventory of the individual provisions according to the purpose for which they are constituted under this Act, drawn up to the extent and in a manner specified for the creation of the reserves by special legislation1a) without the influence of International Accounting Standards.
(1) The expenditure (costs) for which reserves and adjustments have been created must, as a priority, be paid from those reserves and allowances. the reserves shall be cancelled during the same period where the reasons for which they were created have ceased to exist. Reserves and weightings shall be abolished on the date on which the business or other self-employed activity or the lease of an undertaking or part of an undertaking forming a separate organizational component pursuant to a separate law (21) (hereinafter referred to as "rental of an undertaking ') is terminated, on the date of interruption of the business or other self-employed activity or lease of an undertaking, provided that such activity or lease of an undertaking is not commenced by the date for filing the tax return for the relevant tax period in which the interruption took place. Reserves and weightings shall also be abolished on the effective date of the lease contract in the case of the lease of the firm (21), on the day preceding the date of cancellation of the permanent establishment in the Czech Republic (22), on the day preceding the date of entry into liquidation or on the day preceding the date of application of the bankruptcy decision. The provisions shall not be cancelled where the funds in the amount of the reserves made up pursuant to § 9 and 10 are deposited in a special bank account in accordance with § 10a and in the case of company conversions (21). The adjustment appropriations shall not be cancelled for claims acquired in the conversion of the company (21). In the conversion of the company (21), the acquiring company may continue to create reserves and adjustments started by the company being divided, under conditions which would apply to the company being divided, provided that the transformation would not take place and only to the extent that they relate to a part of the commercial property (21) which is transferred to that acquiring company.
(2) Reserves may not be created for expenditure (costs) on the acquisition of tangible and intangible property (3).
(3) The adjustment items shall be used to cover losses arising from the write-off of the claims for which they are created or to cover the difference between the nominal value of the claim and its purchase price agreed at the time of assigning the progressive3a). Adjustments shall be cancelled during the same period when the reasons for which they were created have ceased to exist.
(4) The balance of provisions and adjustments established at the end of the reporting period shall be transferred to the following period.
(5) The total amount of the adjustment appropriations for banks, including bank reserves, must not exceed the total amount of claims to which it is generated.
Bank reserves and adjustments
(1) As expenses (costs) for attaining, securing and maintaining income (1), banks (4) may create in the tax period
(a) weightings to outstanding credit claims;
(b) provisions for bank guarantees granted for loans granted by banks.
(2) Total amount of production for the tax period
(a) the adjustment appropriations referred to in paragraph 1 (a) may not exceed 2% of the basis, which is the average balance sheet value of the outstanding loan claims arising from the principal and interest in the valuation not reduced by the adjustments and provisions already created and reduced by that part of the average balance sheet value of the outstanding loan claims secured by accepted bank guarantees;
(b) the provisions referred to in paragraph 1 (b) shall not exceed 2% of the average value of the bank guarantees granted for loans granted by banks.
Corrective items must always be assigned to individual claims, reserves to individual guarantees. Average stocks shall be calculated on the monthly balances on the last day of the month and the balance on 1 January of the relevant tax year.
(3) A credit claim shall, for the purpose of making adjustment items, be understood as a principal and interest claim, if it arose from a loan granted to a bank4) a non-bank entity or from the performance of a bank guarantee, an entity domiciled or resident in the territory of a Member State of the European Union, and the contract has been negotiated as a credit agreement or a bank guarantee contract pursuant to the provisions of the Commercial Law (21), or under comparable legal provisions of a Member State of the European Union under which the provision of credit is negotiated, except where the law of a non-member of the European Union is used for the negotiation of a credit agreement and its provision, even though the application of that law allows the law of the relevant Member State of the European Union.
(4) A bank guarantee shall be a bank guarantee for the purposes of the provision of reserves, which has been granted to an entity having its registered office or residence in the territory of a Member State of the European Union where it is used for the negotiation and provision of the law of a Member State which is a member of the European Union, except where the law of a State which is not a member of the European Union is applied in connection with a bank guarantee, even if the application of that right allows the law of the Member State of the European Union concerned.
(5) Where a loan or a bank guarantee is agreed or granted through a third party having its registered office outside the territory of a Member State of the European Union or in a contractual relationship with that person, the right of a State which is not a member of the European Union shall be exercised, even if the application of that right allows the law of the Member State of the European Union concerned, it shall not be a credit claim or a bank guarantee within the meaning of the provisions of paragraphs 1 and 2.
(6) If the bank (4) has never constituted an adjustment under paragraph 2 (a) to the credit claim as defined in paragraph 3, it may create an adjustment amount up to 100% of the outstanding balance sheet value of the claim without accessories, subject to these conditions
(a) the balance sheet value of the claim without accessories at the time of its formation does not exceed CZK 30 000;
(b) at least 12 months have elapsed since the agreed maturity date; and
(c) on the date on which the adjustment is made (4), the total value of the claims, excluding the facilities arising from loans to the same borrower, does not exceed CZK 30 000.
A claim for which an adjustment under this provision has been established shall be required to keep separate records.
(7) If, on the basis of commercial documents5) and account6), the bank demonstrates the justification for making adjustments and provisions higher than those referred to in paragraph 2, the tax administrator may, at the request of the bank, recognise the creation of adjustments and provisions at such a proven amount. The decision on the application shall be taken by the tax administrator in accordance with the special law governing tax administration (16).
(8) The corrective item referred to in paragraph 1 (a) shall be cancelled if the reasons for its existence have ceased to exist or if the claim for which it was established has been barred. The adjustment item shall be used by the bank to cover losses arising from the write-off or transfer of the debt. The provision referred to in paragraph 1 (b) shall serve to cover losses related to the implementation of the bank loan guarantees provided.
(1) As expenses (costs) for attaining, securing and maintaining income (1), savings and credit cooperatives (6a) and other financial institutions may, during the tax period, establish weightings for the outstanding claims arising from loans or loans (hereinafter referred to as "loans"), including related accessories, provided by these entities to natural persons resident in the territory of a Member State of the European Union under a credit agreement (6b) or loan contract (6g). Reductions cannot be created at
(a) claims arising between connected persons as defined in the Income Tax Act 13g);
(b) claims acquired by disposal;
(c) claims arising out of an agreement to replace an existing commitment by a commitment of new 6c and a settlement agreement 6d).
Adjustments may not be made in the tax period in which the liquidation or bankruptcy takes place and in the course of the liquidation and during the insolvency proceedings during the period of effect of the bankruptcy declaration.
(2) For the purposes of this Act, other financial institutions are legal entities which fulfil all of the following conditions:
(a) provide loans as a business 6e) on the basis of a trade authorisation 6f) for this activity;
(b) the proceeds, including interest on late payments, of the loans granted pursuant to paragraph 1 shall be at least one half of the total revenue in the relevant tax year;
(c) their capital on the last day of the tax period is at least CZK 2 000 000.
Proceeds referred to in point (b) shall mean income recognised in accordance with specific legislation1a. Other financial institutions for the purposes of this provision are not banks (4).
(3) Adjustments are made to the basis, which is the average balance sheet value of outstanding credit claims without valuation accessories not reduced by the adjustments already generated. Amounts shall not be included in this base.
(a) claims in excess of CZK 1,500 000 for a single loan;
(b) claims arising between connected persons as defined in the Income Tax Act 13g);
(c) claims acquired by the transfer;
(d) claims arising from an agreement to replace an existing commitment by a commitment of new 6c and a settlement agreement 6d);
(e) claims for which, during the tax period, the weightings referred to in paragraph 5 have been established.
The average situation shall be calculated on the monthly balances on the last day of the month and the balance on the first day of the relevant tax year.
(4) The total amount of the adjustment appropriations referred to in paragraph 3 for the tax period may not exceed:
(a) 1,5% of the base referred to in paragraph 3, for savings and credit cooperatives, and for those other financial institutions whose capital is at least CZK 20 000 000 on the last date of the tax period,
(b) 0,6% of the base referred to in paragraph 3 for other financial institutions whose capital is at least CZK 10 000 000 on the last day of the tax period,
(c) 0,2% of the base referred to in paragraph 3 for other financial institutions whose capital amount at the last date of the tax period is at least CZK 2 000 000.
(5) Adjustments shall also be made to outstanding claims arising from loans up to 100% of outstanding balance sheet value of the claim without accessories, subject to all the following conditions:
(a) the balance sheet value of the claim without accessories shall not exceed CZK 30 000 at the time of its formation,
(b) more than 12 months have elapsed since the agreed repayment period.
The entities shall be required to keep separate accounts of claims for which the weightings referred to in this paragraph have been established. The adjustment appropriations may be used as expenditure (cost) for attaining, securing and maintaining income 1d) for the tax period in which they were created, provided that the claim for which they were created is entered in the taxpayer's accounts in accordance with the special legislature1a) and on the last day of the relevant tax period, the total value of the receivables without the accessories entered in the taxpayer's accounts under the special legislature (1a) arising from loans to the same borrower does not exceed CZK 30 000.
(6) Adjustments shall also be made to outstanding claims under accessories up to 100% of the outstanding balance sheet value of the claim, subject to these conditions.
(a) the accessories are linked to a claim to which adjustments may be made under this provision;
(b) the amount of the accessories has been entered in revenue during the relevant tax period or in previous tax periods and the income generated has not been recognised in accordance with special legislation 1d) income exempt from income tax or not included in the income tax base; and
(c) the total value of the claims arising from accessories meeting the two conditions referred to in (a) and (b) relating to the claims of the taxpayer arising from loans to the same borrower shall not exceed CZK 30,000.
The entities shall be required to keep separate accounts of claims for which the weightings referred to in this paragraph have been established.
(7) The adjustments created shall be used to cover losses arising from write-offs or transfers of claims referred to in paragraph 1, with the exception of those referred to in paragraph 1 (a) to (c). The losses arising from the write-off or transfer of claims up to the amount covered by the use of the adjustment appropriations established under this provision are expenditure (cost) incurred to achieve, secure and maintain income 1d).
(8) The adjustment appropriations referred to in paragraph 4 shall be authorised for the relevant tax period by the other financial institutions, provided that, in the following two tax periods, they do not reduce the share capital to an amount corresponding to the lower formation of the adjustment items or which does not allow the formation of adjustments. The reduction in capital for the purposes of this provision shall be assessed on the last day of the relevant tax period. For the tax period in which the capital is reduced, the taxable amount shall be increased or the tax loss shall be reduced or the tax liability shall be adjusted by the difference between the amount of the weightings created and the amount of the capital corresponding to the reduction.
Insurance provisions
Technical provisions in insurance under the Specific Regulations (7) shall be recognised for the purposes of determining the income tax base in the period for which the tax return is submitted as the creation of provisions which are the expenditure (cost) to achieve, secure and maintain income, namely:
(a) technical provisions for non-life insurances10), with the exception of compensatory provisions 10) and other technical provisions 10);
(b) technical provisions for life insure11) except for other technical provisions 11).
Provisions for the repair of tangible assets
(1) Provisions for the correction of tangible property (12), which is expenditure (cost) on attaining, securing and maintaining income (1), whose depreciation period laid down by the Income Tax Act is five years or more, can be created by taxpayers of income taxes who:
(a) have a right of ownership to tangible property or are an organisational part of the State responsible for the management of State property (12a), or are a state organisation responsible for the management of State property (12a), unless that reserve is created by the lessee under (b);
(b) the tenants of the tangible property are under a contract to rent an undertaking and are contractually obliged to repair such property in writing;
(c) they undergo reorganisation or derecognition under special legislation 12b) and the right of ownership of the tangible assets to which the reserve was constituted was not affected by the course of insolvency proceedings or the final termination of insolvency proceedings.
(2) A technical evaluation under the Special Law 13 is not regarded as corrigenda under this Act.
(3) The provision referred to in paragraph 1 shall not be created in cases of tangible property,
(a) which is intended for disposal,
(b) in respect of damages or other unforeseen or accidental events;
(c) repairs which are regularly repeated each year;
(d) the right of ownership of the taxpayer whose assets are subject to bankruptcy under special legislation 12b).
(4) The amount of the provision for the repair of tangible property is determined on the basis of the individual tangible property to be corrected and the nature of the correction. The amount of the reserve in the tax period is equal to the share of the budget of the correction costs and the number of tax periods that will elapse from the beginning of the reserve creation until the estimated start of the correction. The number of tax periods applicable for the purposes of calculating the amount of the reserve shall include the tax period when the reserve is started. This number of tax periods does not include the expected tax period when the correction is initiated. In the case of movable goods, the provision for the correction of individual tangible assets may consist in relation to the volume of its performance in technical units; in that case, the amount of the reserve in the tax period shall be equal to the product of the budget share of the correction costs per unit of expected volume of output and the sum of the volumes of actual output for the tax period and for the preceding period, unless it was the tax period.
(5) If the correction is not initiated at the latest during the tax period following the tax period in which the amount of the reserve was expected to start the correction, the reserve shall be cancelled in the following tax period. The provision or balance thereof shall be cancelled even if it has not been exhausted in the tax period following the tax period in which the correction was initiated at the latest. For the purposes of this Act, the date on which work directly on the subject of the correction is to be physically carried out shall be considered as the start of the correction; where a repair is carried out outside the premises of the payer by another person, the start of the repair shall be the taking over by that person. This provision shall not apply to taxpayers who prove that the time limits have been exceeded by interference by a public authority or self-government authorities.
(6) If an income tax payer finds a fact justifying a change in the amount of the reserve, it must make an adjustment to its amount from the tax period in which it becomes aware.
(7) The provision for corrections to individual tangible assets must not consist of only one tax period.
(8) The maximum period for the creation of a reserve under the preceding paragraphs shall be:
(a) in the second depreciation group 3, the tax period
(b) in the third depreciation group 6 tax periods
(c) in the 4th depreciation group 8 tax periods
(d) in the 5 and 6 depreciation groups 10 tax periods
as defined in the Income Tax Act (1c) and sequestered in each depreciation group, the period for which the tax return was filed but the tax period was not taken into account.
(9) In the beginning of the provision, the income tax payer may continue to create the provision for the repair of the hired tangible assets referred to in paragraph 1 (b) and, in the course of the creation of the reserve, became the owner of that property if the justification and purpose of the original object of the creation are respected.
(10) The payer who pays value added tax shall base the reserve on the budget of the cost of the valuation correction without value added tax.
(11) In the case of conversion (21), the tax period for the purposes of establishing the reserve referred to in paragraph 1 shall also be considered as the period for which the return is to be made.
Adjustments to claims on debtors in insolvency proceedings
(1) Corrections to claims on debtors in insolvency proceedings, which are expenditure (cost) on attaining, securing and maintaining income (1), may be made by tax payers who keep accounts up to the amount of the balance sheet value of outstanding claims entered in court within the time limit set by the court's resolution on bankruptcy during the period for which the tax return is filed and in which they were registered. If reorganisation has been authorised, instead of applying for the claim, it is sufficient that the creditor's claim is correctly included in the list of commitments under special legislation12b). Claims entered after the expiry of the period laid down in the court's decision on bankruptcy and claims excluded under Paragraph 2 (2) shall not be subject to the form of adjustments which constitute expenditure (costs) for attaining, securing and maintaining income (1) under that provision.
(2) The adjustment appropriations shall be cancelled following the results of the insolvency proceedings or, where the claim has been effectively denied by the insolvency administrator, the creditor or the debtor and special legislature12b, the right to deny those persons the claim.
(3) If the reasons for the existence of an allowance established pursuant to this provision or on the basis of the decision of the taxpayer are waived, the amount of the allowance may be reduced to a level which could be created under the provisions of Section 8a. The taxpayer then continues to create an adjustment item according to § 8a.
Adjustments to outstanding claims due after 31 December 1994
(1) Corrective items for non-barred claims payable after 31 December 1994, whose balance sheet value at the time of formation does not exceed CZK 200 000 and whose formation is expenditure (cost) for attaining, securing and maintaining income (1), may, in the period for which the tax return is filed, be constituted by the tax payers who keep accounts if they do not produce such claims with the adjustment appropriations and reserves provided for in § 5 and 5a, and more than 6 months have elapsed since the end of the agreed maturity of the claim, up to 20% of the outstanding balance sheet value.
(2) Higher weightings than those referred to in paragraph 1 may be established for claims referred to herein only where the arbitration procedure under special law 13f has been initiated, or legal proceedings or administrative proceedings under special law 13h), where the tax payer is duly involved and does, in due time, the actions necessary for the exercise of his right and provided that more than
(a) 12 months, up to 33% of the outstanding balance sheet value of the debt;
(b) 18 months, up to 50% of the outstanding balance sheet value of the debt;
(c) 24 months, up to 66% of the outstanding balance sheet value of the debt;
(d) 30 months, up to 80% of the outstanding balance sheet value of the debt;
(e) 36 months, up to 100% of the outstanding balance sheet value of the claim.
(3) Corrections to non-barred claims payable after 31 December 1994, the balance sheet value of which at the time of formation is more than CZK 200 000 and are not subject to adjustments under § 5 and 5a, may, in the period for which the tax return is filed, be constituted by the tax payers who keep accounts only if, in respect of such claims, the arbitration procedure has been initiated under the special legislature13f) or the legal proceedings or administrative proceedings under the special legislature 13h), which the tax payer is duly involved and is duly and in time to take the necessary to exercise of his right, on condition that, as from the end of the agreed period of maturity of the claim, more than
(a) 6 months, up to 20% of the outstanding balance sheet value of the debt;
(b) 12 months, up to 33% of the outstanding balance sheet value of the debt;
(c) 18 months, up to 50% of the outstanding balance sheet value of the debt;
(d) 24 months, up to 66% of the outstanding balance sheet value of the debt;
(e) 30 months, up to 80% of the outstanding balance sheet value of the debt;
(f) 36 months, up to 100% of the outstanding balance sheet value of the debt.
(4) The weightings referred to in paragraphs 1 to 3 may not be applied to claims already written off against the result of the management and to claims arising from:
(a) as shareholders, shareholders, members of the subscribed equity cooperatives;
(b) between connected persons defined in the Income Tax Act 13g).
(5) The adjustment appropriations established pursuant to paragraphs 1 to 3 shall be cancelled where the reasons for their existence have been waived or where the claim for which the adjustment item was established has been barred or where the reasons for which the amortisation of the claim is deemed to be a cost of attaining, securing and maintaining income have occurred in accordance with the provisions of the Income Tax Act.
Adjustments to claims under guarantee for customs debt
(1) Corrections under Sections 8 and 8a of this Act may be made by taxpayers of income taxes who keep accounts and who are liable for a customs debt under the Customs Act to claims arising from the liability for a customs debt (i.e. security of the customs debt) under the Customs Act.
(2) The adjustments referred to in paragraph 1 may be made only up to the value of the claim corresponding to the payment of the customs debt.
(3) The guarantor may not make the adjustment items on account of a guarantee claim that has been met if the debtor's debt has not been met at the due date determined by the customs authorities.
If the taxpayer does not comply with Article 5, 5a, 6, 8, 8a and 8b for an outstanding claim, he may, in the tax period, make up to 100% of its outstanding balance sheet value without accessories only if:
(a) it is not a claim as defined in Paragraph 8a (3);
(b) the balance sheet value of the claim without accessories at the time of its formation shall not exceed CZK 30 000;
(c) at least 12 months have elapsed since the agreed maturity date; and
(d) the total value of the claims, without any accessories, arising from the same debtor for whom he applies the procedure under this provision shall not exceed CZK 30,000 for the tax period.
A claim for which a correction has been made under this provision shall be the subject of a separate register.
Provision for cultivation activities
(1) Cultivation activities for the purposes of this Act are the restoration of the forest and any educational activities carried out in crops up to their forty years of age, the protection of the forest and measures to restore the crops with an inappropriate or replacement woody composition. The reserve may only be drawn and drawn on the performances listed in the Annex to this Act.
(2) The provision for cultivation activities, which is the expenditure (cost) for attaining, securing and maintaining income (1), may, in the period for which the tax returns are made, be constituted by taxpayers who are required under the Special Act (14) to carry out the renewal, conservation and education of forest crops.
(3) The reserve for growing activity is created according to the volume of timber harvested in m3. The amount of this reserve shall be determined by the taxpayer himself in the budget of the costs of growing. The reserve shall be drawn up in the course of the work of the growing activity and, if the work is not carried out in a budgeted volume, the reserve shall be cancelled.
Other provisions
(1) For the purpose of determining the income tax base, a reserve for de-mudding of the pond is recognised, which means removing the deposits from the bottom of the pond caused by erosion of the surrounding land. A reserve for de-mudding of the pond may be made up to a maximum of 10 consecutive tax periods; in so doing, the arrangements for its creation, determination of the amount and application shall apply mutatis mutandis to the provision for the provision for corrections under this Law.
(2) For the purposes of determining the income tax base, the provision of funds for the remediation of land affected by mining, the reserve for the settlement of mining damage 15) is further recognised, and the provisions for which the special law states that the expenditure (costs) is to be attainedfor attaining, securing and maintaining income 1).
(1) The funds in the amount of the reserves referred to in Articles 9 and 10 (1) or the reserves defined in Article 10 (2) shall also be deposited in a separate account in a bank located in the territory of the Czech Republic or, in the case of reserves defined in Article 10 (2), with the agreement of the relevant district mining office, the competent regional office or the management of radioactive waste storage facilities, also in a separate account in a bank located in the territory of another Member State of the European Union, which is intended exclusively for the deposit of reserves constituted in accordance with Articles 9 and 10 (1) or the provisions defined in Section 10 (2) of the income from the sale of State bonds issued by the funds of that reserve 24 (hereinafter "special account"). For the purposes of this provision, income from funds linked to a special deposit account and interest income on government bonds purchased from special deposit funds shall be taken as income from the special guarantee account. The funds of a special linked account may be used only for the purposes for which the reserves have been created, with the exception referred to in paragraph 4. The taxpayer will always set up only one special account for each purpose of creating the reserve, which is held in Czech crowns or in euro.
(2) In the tax period or in the period for which the return is made, the recognised creation of reserves as defined in paragraph 1 shall be the expenditure (cost) to achieve, secure and maintain revenue, provided that:
(a) cash equivalent to the amount of the recognised reserve formation shall be transferred to a special account bound by the deadline for filing the tax return at the latest; if they are not transferred in full, the expenditure (costs) to achieve, secure and maintain income shall only become that part of the recognised reserve formation that has been transferred to the special tied account at the latest by the tax return date; and
(b) the funds deposited in a special account shall not be used to cover expenditure related to the purposes for which the reserves referred to in Articles 9 and 10 (1) or the reserves defined in Article 10 (2) have been created, up to the amount of the reserves created before 31 December 2003 or until the end of the period for which the return is made and which began in 2003, unless those reserves have subsequently been completely cancelled or exhausted; if those reserves have subsequently been cancelled or drawn only partially, that condition shall apply only to the uncancelled part of the said reserves. This condition shall not apply where a special law expressly provides for an obligation to transfer funds to a special tied account equal to the provisions previously created or to their specific legislation of the defined part which have been used as expenditure (cost) to achieve, secure and maintain revenue by 31 December 2003.
(3) Where a payer uses funds deposited in a special account in contravention of the condition set out in paragraph 2 (b), he shall be entitled to apply the recognised creation of provisions as defined in paragraph 1 as an expense to achieve, secure and maintain the income referred to in paragraph 2 at the earliest in the tax period or in the period for which the tax return is made, in which the sum of the funds deposited in the special account referred to in paragraph 1 and the value of the government bonds held in a separate account with the Czech National Bank, the Securities Centre or the Central Depository, to which the Czech Republic, acting through the Ministry of Finance, shall transfer the Central Bank's records (hereinafter referred to as "the Central Depository ') 1b), shall achieve at least the amount of the reserves referred to in § 9 and § 10 (1) or the provisions defined in § 10 (2).
(4) The funds of the reserves referred to in paragraph 1 which are deposited in a special binding account may also be used for the acquisition of government bonds denominated exclusively in the Czech koruna, namely:
(a) provisions for the remediation of the land affected by mining and mine-management provisions (15) only on the basis of the agreement of the relevant district mining authority;
(b) provisions for the reclamation and remediation of landfills (25) only subject to the agreement of the competent regional authority;
(c) provisions to ensure the decommissioning of a nuclear installation or a Category III or Category IV site (26) only subject to the consent of the Radioactive Waste Storage Administration.
(5) The government bonds referred to in paragraph 4 shall be held in a separate account with the Czech National Bank, the Securities Centre or the CSD and the taxpayer shall keep separate records of them. The proceeds from the sale of such bonds must always be transferred without delay to the special tied account from which they were acquired.
(6) The funds deposited in a special binding account and sovereign debt held in a separate account under paragraph 5 shall not be the subject of collateral, shall not be included in the property of the taxpayer in insolvency proceedings (12b), shall not be subject to enforcement (27) or execution (27).
(1) The balances of provisions having the character of reserves under this Act as established on 31 December 1992 shall be treated as reserves under this Act and shall be transferred until 1993.
(2) Provisions established in accordance with the applicable accounting rules before 1 January 1993 and transferred to 1993, as well as the years following 1993, shall be used to cover the expenditure (s) for which they were created. If the reasons for which they were created are omitted, these reserves shall be abolished in the relevant tax year.
This Law shall take effect on 1 January 1993.
Annex
PERFORMANCE OF RESERVES AS EXPENDITURE
Article 9 (1) of this Law shall be deemed to be the performance of:
1. Restoration of the forest by sowing seed
(a) first seed sowing
(b) repeated sowing of seed.
2. Restoration of the forest by planting
(a) first seed
(b) repeated seed.
3. Soil preparation for forest renewal
(a) soil preparation for natural forest renewal
(b) soil preparation for the renewal of the forest by seed sowing
(c) soil preparation for rebuilding the forest by planting.
4. Treating the trees of young forest crops.
5. Mechanical and chemical protection of young forest areas against animals.
6. Fencing of fences during fencing of young forest areas.
7. Protection of young forest crops
(a) anti-riot
(b) against rodents
(c) against pinewood
(d) cutting of weeds.
8. Cutting, pruning and performance associated with the creation of a splintering line.
9. Protecting the forest against game mechanical, chemical, maintenance and repair of fences.
10. Protection of forest against insect pests.
11. Fertilisation of forest crops.
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Regulation Information
| Citation | Full text of Act No. 89 / 2008 Coll., Act No. 593 / 1992 Coll., on Reserves for the Determination of Income Tax Basis, as resulting from subsequent amendments |
|---|---|
| Regulation Type | Declared full text |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 12.03.2008 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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