Czech Republic: Working paper on possible “windfall tax”
Proposes to tax extraordinary profits in the energy and banking sectors and, possibly, in fuel production and distribution
Proposes to tax extraordinary profits in the energy and banking sectors and, possibly, in
The government released a working paper on extraordinary profits tax (“windfall tax”) that discusses the possible introduction of the tax on various sectors. The finance ministry will now use the document as the basis for drafting a bill.
The document proposes to tax extraordinary profits in the energy and banking sectors and, possibly, in fuel production and distribution. Extraordinary profits would be determined as the difference between the current year’s tax base and the average tax base for the preceding five-year period and be subject to an additional tax at 40%, 50%, or 60%.
The document admits that retroactive application of the tax would be problematic. Thus, it is likely that the tax would only be effective after completion of the entire legislative process (i.e., from 2023).
Read a September 2022 report prepared by the KPMG member firm in the Czech Republic
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