CURRENT NEWS
Treaty on Elimination of Double Taxation Concluded between the Czech Republic and Bosnia and Herzegovina Based on the information provided by the Ministry of Foreign Affairs, the Ministry of Finance has informed that on 12 May 2010 the Treaty on Elimination of Double Taxation and Prevention of Tax Evasion in the Field of Income and Property Taxes between the Czech Republic and Bosnia and Herzegovina came into effect. The treaty was concluded in Prague on 20 November 2007. The provisions of the treaty will be executed in the case of tax levied at source and revenues paid or subscribed as at 1 January 2011 or later. In the case of other income and property taxes, the treaty will be applicable to income or property for every taxable year starting 1 January 2011 further.
PAYMENTS OF VAT IN THE CASE OF PROVIDING A VEHICLE FOR PRIVATE USE FREE-OF-CHARGEVAT paid on private use of a vehicle may be included in tax deductible expenses of an employer.
In the event that an employer provides a company owned vehicle to his/her employee also for private purposes, it is the employee’s non-monetary income. It is part of his/her gross wage pursuant to Act No. 586/1992 Coll., the Income Taxes Act (hereinafter as the “ITA”). With respect to VAT, two regimes may occur:
•Upon purchase of a vehicle, VAT deduction is claimed only in the ratio which reflects actual use of such vehicle for company purposes.
•Upon purchase of a vehicle, full VAT deduction is claimed. Subsequently, VAT on employees’ temporary private use of such vehicle must be paid, since VAT deduction of this asset had been claimed.
