Amendments to the Inheritance, Gift and Real Estate Transfer Tax Act

The Senate approved an amendment to the Inheritance, Gift and Real Estate Transfer Tax Act on 18 June 1998. As mentioned in our June edition, this amendment abolishes inheritance tax between children, parents, grandchildren, grandparents and inheriting spouses.

The amendment will also enable tax payers to automatically claim back real estate transfer tax paid, in cases where the sale contract is cancelled within two years of the transfer of the ownership title in the Cadastral Register.

Travelling Expenses Reimbursement Act

The Senate recently passed an amendment to the Travelling Expenses Reimbursement Act. The amended version is effective as of 1 July 1998.

The main areas of the amendment can be summarised as follows:

* Meal allowances

Meal allowances are not stipulated as fixed amounts but in ranges as follows:

Business trip lasting:

5 to 12 hours     Kc 53 to 64
12 to 18 hours    Kc 81 to 97
over 18 hours     Kc 127 to 152

The employer sets the meal allowance either prior to the business trip or this amount can also be stipulated in employment contracts or inter-company guidelines. If the employer arranges for a free meal, the meal allowance is proportionately reduced, by a minimum of 20% and a maximum of 40% for each free meal. The above reduction is set prior to the business trip, otherwise no reduction may be applied.

* Reimbursement for use of road vehicles

The standard reimbursement rate per kilometre travelled will be Kc 3.30 for personal vehicles.

* Business trips abroad

The employee is entitled to meal allowances in a foreign currency provided either in cash or by credit card. Upon the employee's request, the advance payment could be made in a different currency to that of the country of the business trip destination. Should the business trip abroad last more than 12 hours, the employee is entitled to the full one-day amount. If the trip lasts less, the employee can be reimbursed up to 50% of the daily allowance.

* Reimbursement while transferred abroad

Czech employees who regularly work abroad are entitled to reimbursement for the days spent travelling to their place of work as if they were on a business trip abroad. If the employee is accompanied by a family member, then the employee is entitled to reimbursement of the travel, accommodation and necessary additional costs related to the family member accompanying.

Lottery Act Amendment

The Lower Chamber of Czech Parliament overrode the President(s veto and passed an amendment to the Lottery Act on 18 June 1998. The Act does not allow companies with foreign participation to stage lotteries, including certain consumer contests. The interpretation of its wording is not clear as to whether the ban applies to direct immediate participation or not.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

For further information on the above, please contact Mr Richard Fletcher by telephone on +420 2 2440 1300 or E-mail directly to Click Contact Link