Czech News - December 1997 - Anticipated Changes In The Czech Tax System - Bad D

In accordance with the recently introduced pro-export policy, the Government will present to Parliament a proposal that should make the value of certain old bad debts more realistic. The Government intends to decrease, forgive or postpone repayment of debts owed by Czech companies to the State, where those bad debts arose in connection with an underlying foreign bad debt. Situations with underlying receivables from the following countries are affected:

• those where the Czech Republic imposed economic sanctions, or
• those whose economy was disturbed by national or war conflicts, or
• those where international organisations of creditors have enabled forgiveness of the country's debts or postponement of the debt instalments.

The Ministry of Finance expects that the Amendment should come into force in 1998.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

For further information on the above, please contact Mr Richard Fletcher by telephone on +420 2 2440 1300 or E-mail directly to richard.g.fletcher@arthurandersen.com