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Czechs will Spend 174 Days Working to Pay Taxes as this Year’s Tax Freedom Day Falls on 23 June

Praha, 22 January 2019 – This year, taxpayers in the Czech Republic will spend 174 days working to pay taxes, which is one day fewer than last year. According to Deloitte’s calculations, Tax Freedom Day will fall on 23 June 2019. Approximately the same as in the Czech Republic will apply to Germany and Slovenia. Taxpayers will have to spend the most days paying taxes to the government in France, while the fewest in Romania and Bulgaria.

“In 2019, the total tax burden should slightly decline in the Czech economy. This has been aided by the re-assignment of selected services and goods from the basic VAT rate to the first or second reduced VAT rates. This, for example, applies to water and sewer rates, catering services, bike repairs or hairdresser’s and barber’s services. A whole series of parameters have also changed in respect to personal income tax. As part of excise taxes, a tax has newly been imposed on heated tobacco products,” says David Marek, Deloitte’s Chief Economist. “In the long term, the level of taxation is on the rise in the Czech Republic and, as the date of its Tax Freedom Day suggests, its total tax burden ranks it among the EU’s upper half.”

Taxes in Practice: Increased Administrative Work, Tighter Audits and Frequent Changes to Legislation

Although the total tax burden is slightly declining, taxpayers and remitters have been experiencing an increase in the number of tax requirements in the long term. Businesses spend a rather lengthy amount of time on tax compliance, which is also for the reason that, in a number of cases, they do not merely explain the misstatements in their reports, but also clarify misstatements made by their business partners.

Previously, tax authorities focused on individual items. Lately, they have been assessing the overall economic and tax situation of the taxpayers/remitters based on a more detailed analysis of the data in tax returns and reports and other information sources. This places greater demands regarding the correct systems setup as well as the skills, knowledge and regular training of taxpayers’ employees.

“For a long time, it has no longer been sufficient to merely correctly maintain accounting records and supporting accounting documents to demonstrate the correctness of the reported tax position. Many cases, taxpayer/remitters are obliged to substantiate their assertions, for which reason they archive large amounts of various documents relating to their activities. Given the complexity and interrelatedness of all systems, each legislative change, albeit seemingly minor, carries a great cost for large companies,” says Radka Mašková, Director at Deloitte’s Tax services.

Tax Freedom Day

Tax Freedom Day is a simple and easily comprehensible demonstration of the tax burden in the economy. The method used for calculating the date of Tax Freedom Day divides the year into two parts, in a ratio corresponding to the proportion of the government sector’s total taxable income to net national income. Calculations for prior years are always updated in reviewing the statistical offices’ data used in the calculation.  

The number of days for which taxpayers in the selected countries of the EU need to work to pay taxes to the government and the date of Tax Freedom Day:

Country Number of days Tax Freedom day
Romania 114 24 April
Bulgaria 121 1 May
Lithuania 129 9 May
Latvia 144 24 May
Estonia 145 25 May
Cyprus 145 25 May
United Kingdom 148 28 May
Malta 150 30 May
Poland 151 31 May
Spain 152 1 June
Slovakia 153 2 June
Ireland 154 3 June
Norway 164 13 June
Portugal 166 15 June
Netherlands 168 17 June
Slovenia 170 19 June
Germany 173 22 June
Czech Republic 174 23 June
Hungary 182 1 July
Greece 183 2 June
Italy 185 4 July
Austria 188 7 July
Finland 190 9 July
Sweden 192 11 July
Denmark 201 20 July
Belgium 206 25 July
France 209 28 July

Source: Deloitte, January 2019 calculation

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