Final Word from Wednesday, April 4, 2007
Economists will be debating for a long time whether the tax reforms presented yesterday are good or bad for individual taxpayers. For one group of taxpayers, though, the answer is already a clear Yes. Sole proprietors, landlords, license holders and others who either aren't subject to social-security tax or who enjoy a low cap on the tax will profit significantly from the changes. They'll pay 15% on their income and, in their case at least, it will be a true 15%, because there won't be employer-paid social tax to add to the base. In addition, many of them will still be able to claim a flat expense write-off that far exceeds their actual expenses, which will lower their effective rate below the stated 15%. This is a golden opportunity for business owners who can engage in creative tax planning. And what is unusual on the Czech tax scene, they'll have nine months to put a new structure in place. [Czech Republic]