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Czech Republic: Amendment to asset-valuation law, reflecting market value

Czech Republic: Amendment to asset-valuation law

The asset-valuation law generally concerns the valuation methods to determine a tax base (whether for property tax, income tax, or value added tax, among others).


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The purpose of the asset valuation law is to set general criteria and principles to address attempts at tax evasion. The measures generally are used to determine prices of assets for purposes other than value determined by sales (such as court-ordered settlement and distribution of the joint property of spouses, or decisions by financial institutions to grant mortgage loans). The price determined is also used to assess economy of purchases and sales of property by the state.

Under the current language of the asset-valuation law, the basis for valuation is mainly an asset’s “common price,” which is determined by comparing (negotiated) purchase prices of comparable items. The amendment would broaden the valuation options, introducing the market value as an alternative valuation method.

Under the amendment, this new method would mainly be used in situations when purchase prices of comparable things are not available to determine the common price, either because of the unique nature of the item being valued, or because the item has not yet been traded at the given time and place. Market value would be the estimated amount for which a property would most probably exchange on the date of valuation between a willing buyer and a willing seller in a business transaction in a free market after proper marketing.

Read a July 2019 report prepared by the KPMG member firm in the Czech Republic

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