Tax-free income

The charges brought last week against Radovan Krejčíř's wife for money-laundering were a brief bright spot in an ordeal that has made the police look quite bad. Krejčíř's wife owns their Kč 400m house but didn't report enough income to pay for it. Her lawyer, Tomáš Sokol, chimed in that she earned her money on stock transactions. And herein lies the reason she'll probably go free. One of the best-kept secrets of the tax code is how sales of offshore companies can be used in conjunction with the six- month capital-gains holding period to repatriate money tax-free without breaking any laws. Týden touched on the issue in Feb. 2004 and sent many companies, notably J&T, scampering to cover their tracks. Nobody wants to talk about this (hire a good tax adviser to learn more), and that's why the financial police will likely enjoy their 15 minutes of fame and then let the issue drop. [Czech Republic Kateřina Krejčířová Arthur, Bradley & Smith]