A week less of work to comply with tax requirements for the finance department staff last year

Prague, 19 November 2010 – Compared to last year, the case study company in the Czech Republic needed 53 fewer hours to comply with tax requirements. This means more than six working days, which could be used by finance department staff to perform activities that bring additional value for their company. According to the recent issue of PwC, the World Bank and IFC report Paying Taxes, they need 557 hours (almost 70 working days) to comply with tax requirements, which puts the Czech Republic to 167^th place from the 183 surveyed countries from all over the world. In comparison to the previous year when the Czech Republic was at 171^st place, we have moved up the list by four places.

“The Ministry of Finance has made some progress of work on simplifying the Czech tax system in the past five years. We believe that the new Tax Administration Code together with the establishment of a single Revenue Collection Agency and new Income tax code will bring the real simplification and improvement in positioning the Czech Republic in the global ranking,” said Peter Chrenko, a Tax and Legal Services Partner at PwC Czech Republic.

The challenging economic situation evoked by the global economic crisis has decreased company earnings, and hence their tax payments. On the expenditure side if the budget, governments do not have much manoeuvring room to ease pressure on companies by decreasing of taxes. However, according to PwC surveys among CEOs and owners of noted Czech companies, they see the administration demand factor as more crucial than the rate of taxation.

“While it might be difficult for governments to decrease tax rates in times of economic slowdown, reducing the administrative burden can always be a win-win measure, delivering benefits to both government and business,” commented Lenka Mrázová, Tax Director at PwC Czech Republic.

If the Czech government maintains its effort to reform the system, there is a chance to improve the country’s ranking in the coming years. As at 1 January 2011, the new Tax Code will come into force; in 2013, there should be a new income tax law. The establishment of a single Collection Agency might contribute as well.

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Time to comply with the tax system (hours per year) in EU countries

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