Czech News - Jan 97 - Commercial Code

The Ministry of Finance is preparing a proposal to amend the Commercial Code which should help to improve the tax system and effectiveness of tax collections.

The amendment is intended to be in force from 1 January 1998 and should prevent businesses from being wound-up and leaving behind unmet liabilities. This should be accomplished through the revision of the rules for foundation, winding-up and demerging of companies. The amendment should also help to solve difficulties with enforcement of receivables by banks.

Further amendments to the Commercial Code should also introduce certain limitations on cash transactions as a way to cut down tax evasion. The possibility is being considered that certain cash transfers exceeding limits should not be considered as a tax deductible expense and should not be treated as a taxable supply for input VAT recovery purposes.