The Czech Republic has altered its Investment Incentives Act to provide investors in the country's technology and manufacturing industries certain tax breaks.
Investors in these sectors are now offered ten years of corporate income tax relief, double the past five year relief period. The corporate tax rate currently stands at 19 percent in the Czech Republic.
Moreover the government will now provide grants, subject to government approval, that “should operate as a financial injection at the start of an operation to help investors overcome the period for which they cannot benefit from income tax relief” noted law firm CMS Cameron Mckenna in a client memo.
The amendments, which will go into effect 12 July, reflect the government’s effort to make the Czech Republic Central Europe’s technology hub.
Investments in manufacturing will qualify when at least CZK500 million (€19 million; $24 million) is invested in the manufacturing industry, with at least CZK250 million invested in machinery, and the project creates a minimum of 500 jobs.
Technology centres that are engaged in research, and development and innovation of high-tech products will qualify when a minimum of CZK200 million is invested in technology centres, with at least CZK100 million invested in machinery, creating at least 120 jobs.
Investors involved in software development shared business support services on an international level will get the tax relief and grant if they create at least 40 new software development jobs or at least 100 jobs at other strategic services centres.