Czech Republic: Bill for digital services tax not approved

Any proposal for a digital services tax would have to go through the entire legislative process again.

Any proposal for a digital services tax would have to go through legislative process again

The Czech Chamber of Deputies did not approve a bill proposing a digital service tax before the end of the parliamentary term.

Hence, any proposal for a digital services tax would have to go through the entire legislative process again if the new government wants to introduce a tax on digital services. 

KPMG observation

Some observers believe that the introduction of a bill for a digital services tax would be unlikely given the agreement reached on new international taxation rules at the G20 level because it also includes a commitment by participants not to apply or introduce new digital taxes. 

Background

The government submitted the digital services tax bill to the deputies in 2019. The new tax was to apply to income from targeted advertising and income from the sale of data when the source of the income was a Czech user using a digital interface operated by a foreign company. The tax was also to apply to foreign platform operators’ income generated from the mediation of sales of goods or services in the Czech Republic.

The bill passed through its first and second readings, but time ran out before the third reading.

Read a November 2021 report prepared by the KPMG member firm in the Czech Republic

 

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