Business Briefs

The European Commission has lifted a suspension on the Czech Republic's drawing money from the pre-accession Phare fund; the Czech Senate has passed an amendment to the income tax law; and, real estate advisors say the development of Czech industrial areas and parks will continue into 2005.

Business Briefs

European Commission lifts ban on Czech Republic to draw money from Phare

European Union's Phare programme

The European Commission has lifted a suspension on the Czech Republic's drawing money from the pre-accession Phare fund. The move came after Czech representatives assured the commission the new extended decentralisation system, EDIS, was now in operation in the Czech Republic. The system transfers responsibility for all steps, ranging from the selection of projects to payments, to Czech administration. The comission originally blocked almost 4 billion crowns or 120 million euros, for projects, from EU finances earmarked for the Czech Republic in 2002- 2003. There were fears the country had failed to separate the selection of projects, money transfers, and other cash flow along transparent lines to prevent corruption.

Senate passes amendment to income tax law

The Senate has passed an amendment to the income tax law, introducing - among other things - tax relief for families with children and the joint taxation of spouses, which the government says will save families billions of crowns in coming years. As of 2005, families with children, for example, will be able to deduct 6,000 crowns, the equivalent of 195 euros. Low-income families with more children whose deductions would be higher than their taxable income will be paid by tax offices the difference, up to 30,000 crowns. Most of the country's 1.5 million families with children should benefit from the amended law.

Meanwhile, the government says the joint taxation of spouses will be advantageous for couples with great differences between their incomes.

The Finance Ministry has said that overall the amendment should save Czech taxpayers 3.6 billion crowns in 2005 alone.

Industrial area market on the rise, growth to continue in 2004

According to real estate advisors Cushman & Wakefield Healey & Baker, the Senate has passed an amendment to the income tax law. Currently there are six logistics parks in the Czech Republic, most near Prague, and plans for the construction of new ones are under way in Pilsen, west Bohemia. Next year, Prague and the country's second largest city, Brno, as well as Pilsen and the north Moravian city of Ostrava will all expand their industrial area. According to the real estate consultant there is substantial growth potential and the market should at least double in terms of area within the next four years.

The real estate consulting firm added that that the country's modern storage facilities could reach around two million square metres, but that even so the Czech Republic's storage capacity would remain several times lower than, for example, the Netherlands or Portugal.