Czech Government Approves Bill to Tax Multinationals

The Czech government approved on Wednesday a bill allowing the taxation of large multinational companies which tend to book their profits in countries with a lower tax burden.

The bill affects firms whose annual revenues exceeded 750 million euros in at least two of the past four years. The aim is for multinationals to pay a profit tax of at least 15%.

“We will join countries that refuse to allow corporate profits to be diverted into tax havens,” Finance Minister Zbynek Stanjura said during a televised press conference.

The bill has to be approved by the parliament and signed by the president to become a law. It is based on a European Union directive approved last December as a part of an OECD/G20 initiative to face the digitalization of the economy.

The Finance Ministry expects the new tax raise the annual state budget revenues by 4-6 billion crowns.

The opposition ANO party has said it will support the bill, but is against a fast-track procedure, saying it wants time to table proposed amendments to the bill.