The Czech ministry of industry and trade is preparing a new package of investment incentives to soften the blow of changes to the EU’s regional aid program. New incentives are being proposed that will cut companies’ payments rather than force them to request money from the state. The stricter new rules, to be implemented by the EC this July, are expected to curb the Czech Republic’s traditional investment incentives much more than those in the rest of the CE region. The Czech ministry of industry and trade wants to push through the new set of investment incentives by mid-2014.
“Sending aid is complicated. It is much more advantageous when part of the contributions that [companies] are obliged to pay are simply not levied,” Zbyněk Pokorný, who is in charge of drawing up the new package, told the daily Mladá Fronta Dnes. One option being planned is to offer highly qualified companies with high revenue posts, such as R&D centers, savings on health and social insurance. The savings could reduce standard payments for employees by one-fifth. Traditional tax holidays are not such a benefit for R&D centers, according to Pokorný, as they participate in global research, and their products and profits may be produced elsewhere. Savings on the labor costs of the highly qualified experts would be more lucrative. Property taxes could be also waived, and the existing incentive of CZK 200,000 per new job could be raised to CZK 300,000.
