Tuesday, July 21, 2009Tax Havens Attract More Czech Firms

Cekia: Prague Daily MonitorTax Havens Attract 154 Czech Firms In First Half

The number of Czech companies based in places considered tax havens grew by 154 to 9,144 in the first half of this year, according to databases and calculations of the Cekia agency.

Owing to the economic crisis, interest in transfer of companies to tax havens got smaller. In the full of last year, the number of Czech companies in tax havens rose by 740.

"The fall in interest of Czech companies to move to destinations with lower taxes has evidently been caused by the financial crisis when companies rather try to survive than to optimise their taxes," said Cekia analyst Petra Stepanova.

Efforts of the EU and US governments to fight against companies from tax havens also play a role, she added.

"In the second half of the year, if the condition of the Czech economy improves and if, moreover, left wing [Social Democrats] win the early parliamentary elections, a moderate increase in interest of companies in moving their seats to more attractive destinations as regards taxes can be expected again," Stepanova said.

Among the most attractive places where taxes are not high are the Netherlands, Cyprus and Luxembourg. The highest relative growth this year was seen by Panama, Monaco and Belize. A significant fall was seen by the British Virgin Islands and the Dutch Antilles.

The Finance Ministry has not made any estimates of the amount of taxes the Czech Republic is losing in connection with the tax havens.

The ministry's spokesman Ondrej Jakob earlier said that the problem to define a tax haven and operations aimed at avoiding tax payment is yet another reason.

Under certain conditions, the USA, for example, can also be considered a tax haven.

	No of Czech companies with owner	Dec 31,2008/ June 30,2009	Dec 31,2008 - June 30,2009
	from a given country as of June 30,2009	Change (pct)	(number)
Bahamas	33	0	0
Belize	62	12.73	7
Bermuda Islands	6	0	0
BVI	406	7.94	35
Gibraltar	61	0	0
Jersey	5	0	0
Caiman Islands	33	0	0
Cyprus	1201	4.43	51
Lichtenstein	263	4.36	12
Luxembourg	981	4.92	46
Monaco	46	15	6
Dutch Antilles	13	7.14	1
Netherlands	3516	1.21	42
Panama	127	17.59	19
Seychelles	232	3.11	7
USA	2159	1.12	24
TOTAL	9144	1.71	154

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