Support instruments: Financial instruments

This section provides detailed information about potential financial support instruments on behalf of encouraging development of business enterprises in the Czech republic. More data will be posted as it becomes available. --- **Related articles:** !!!Financial relief for innovative companies- indirect support for R&D In the Czech Republic at the moment, companies cannot rely on any great support from the state for their own research and development. Hence the setting up and running phases of an enterprise with a high requirement for research is one of the most difficult areas to finance. Czech firms devoted to R&D at the present time can make use of two types of financial relief: 1. From the basic tax it is possible to write off 100% of costs for implementing research and development projects carried out for own use, which takes the form of experimental or theoretical work, planning or construction work, budgeting, design of equipment, production of functioning samples or of a prototype or its parts and the certification of results achieved as part of the R&D project. These costs must be shown separately from the business’ other outgoings. When purchasing intangible results of R&D it is necessary to classify them as intangible investment property (IIP) with a write-off period of 72 months. So in the current year only the yearly write-off is included in the costs. 2. Tax relief can apply to entrepreneurs (as physical or legal entities) when making donations towards research and development. For physical entities the value of the donation must exceed 2% of basic tax or must be at least 1000 CZK. In total it is possible to write-off up to 10% of basic tax. Legal entities can write off donations as long as they have a value of a least 2000CZK. In total it is possible to write off from 2% to 5% of reduced basic tax (depending on the purpose for which it is used). Other exemptions apply for non-trading subjects and particularly for universities and contributory organizations - subjects are exempt from gifts and inheritance tax if their main activity is science and research, providing the property donated is intended for science and research. - Non-profit making organizations can deduct 30% of basic tax up to 1 million Czech crowns, providing the means acquired are used for research and development. Specifically mentioned are eg. public universities. For more information please click "here":[ http://www.avo.cz]. Recommended Guidelines for research and development with regard to law no. 586/1992 Sb concerning taxes on income: "http://www.vyzkum.cz/FrontClanek.asp?idsekce=13483":[ http://www.vyzkum.cz/FrontClanek.aspx?idsekce=13483]

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