Analysis of Compliance of the Act on Budget Allocation of Taxes in the Czech Republic with the State Aid Rules - A Time Bomb of Public Finances?

Analýza souladu rozpočtového určení daní v České republice a pravidel veřejné podpory - časovaná bomba veřejných financí?

Jan Kožíšek and Stanislav Klazar

Český finanční a účetní časopis, 2015, vol. 2015, issue 3, 56-79

Abstract: The objective is to find out whether the Czech tax assignment bill does not breach, the rules of State Aid law of the European Union. The result is the current version of the tax assignment bill favors the economically most advanced region of the Czech Republic, from which the undertakings active in the city of Prague benefit, and that this favour breaches the rules of State Aid law. This situation meets the conditions for the incompatible state aid, for which the Czech Republic can be reprimanded by the European Commission. The controversial provision gives Prague a significantly higher conversion rate, which makes the income from shared-taxes per capita much higher than in other municipalities. Changing these conversion rates could be a possible solution.

Keywords: Tax assignment; State Aid; The Capital City of Prague; Rozpočtové určení daní; Veřejná podpora; Hlavní město Praha (search for similar items in EconPapers)
JEL-codes: H72 (search for similar items in EconPapers)
Date: 2015
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DOI: 10.18267/j.cfuc.450

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