The Czech Republic has the highest corporate income tax among the Visegrad Group (V4) countries, and this year’s increase from 19 to 21 percent has confirmed this position. However, the lower corporate tax rates in Slovakia, Poland and Hungary are not available to all companies, where taxation varies according to the size and sector of companies. This is according to a study by the consultancy Forvis Mazars. In the CEE region, the Czech Republic was not the only country to increase corporate taxation this year, with Slovenia also taking a similar step.
The study warns that the setting of the basic corporate tax rate may not be a perfect indicator of the tax burden on companies in individual countries. “If we take into account other specifics of the V4 countries’ tax systems, corporate taxation may not be the highest in the Czech Republic. For example, in Hungary, which has the lowest corporate tax rate in the EU at nine per cent, the total corporate taxation in some sectors can be as high as 50 per cent,” said Pavel Klein, managing partner of Forvis Mazars’ tax department in the Czech Republic.
Slovakia and Poland apply preferential tax rates for smaller companies. In Poland, the general tax rate is 19 percent, but businesses with revenues of up to two million euros (CZK 49.4 million) pay a tax of nine percent. In Slovakia, a 15 percent tax rate applies to companies with revenues of less than EUR 60,000 (CZK 1.5 million) for the tax year, while other companies have a rate of 21 percent.
Corporate tax rates have remained unchanged this year in most Central and Eastern European countries. Apart from the Czech Republic, Slovenia has moved to increase its rate from 19 to 22 per cent. Austria, on the other hand, reduced its tax rate from 24 to 23 percent. This is the second time Austria has cut its corporate income tax by one percentage point since the covid-19 pandemic.
Source: Forvis Mazars and CTK
