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News Investment funds to pay higher corporate income tax

The amendment to the Income Tax Act No. 174/2018 Coll. introduces a change in the taxation of investment funds. So far, the core investment funds, whose profits are subject to a 5% corporation tax, have included investment fuds with shares admitted to trading on a European regulated market.


The aforementioned amendment has thus narrowed the group of “tax privileged” investment funds by setting additional conditions:


  1. No corporate income taxpayer has a share of more than 10% in the investment fund capital, while the shares of related parties are considered to be the shares of one party for this purpose
  2. The investment fund does not carry out any business activity


Any investment fund not meeting the conditions above will be subject to the corporate income tax of 19%. The higher tax rate will now apply to e.g. intra-group investment funds, which have benefited from the lower tax as they were admitted to trading on a European regulated market.  


The amendment shall become effective on 1 January 2019. The investment funds with a tax period commenced before the effective date of this amendment shall be taxed at 5% income tax rate.


In case you are directly affected by this change, do not hesitate to contact us and ask for advice.


Olga Krnáčová

Tax Manager

+420 296 152 246