According to the Minister of Justice Marie Benešová (for YES), the Ministry of Justice, Finance and Regional Development was neutral about the Senate amendments. In front of the deputies, however, Benešová supported the parliamentary version. According to the minister, it is “legally cleaner” and does not go beyond the requirements of European directives.
The Senate version was supported by the anti-corruption initiative State Reconstruction, according to which the law could be a safeguard against public money being able to go to companies with anonymous owners. Companies will be able to easily circumvent the parliamentary version of the law because it does not introduce sufficient control of data in the records, the initiative said in a press release.
The law attracted attention mainly due to a provision that, according to part of the opposition, could help Prime Minister Andrej Babiš (ANO) in a conflict of interest dispute. The passage concerned trust funds. The Chamber of Deputies has previously deleted this provision from the government bill.
According to some interpretations of the government provision, Babiš would be considered the owner of the trust funds in which the Agrofert holding invested, but not the owner of the holding. According to critics, this may have helped him in a situation where the suspicion of his conflict of interest is being dealt with by the EU institutions.
Babiš repeatedly rejects allegations of conflict of interest and calls it a political matter. Last year’s report by the European Commission’s auditors on subsidies from the European Structural Funds stated that Babiš had a conflict of interest. According to the report, it still has an impact on the Agrofert holding, although in 2017 it invested it in trust funds.
The draft responds to the fact that the current regime of registration of beneficial owners does not meet the requirements of the European Directive on the publication of certain data about them. There are also no mechanisms for verifying and checking the veracity of data in the records, as well as effective sanctions for non-compliance, the explanatory memorandum states.
The bill defines the concept of the real owner more generally and more precisely. It determines which legal entities cannot have it due to their nature. The obligation to register the beneficial owner does not make sense, for example, in the case of associations of owners of residential and non-residential units, hunting associations, contributory organizations and business corporations exclusively controlled by the state, the justification states.
The draft should also reduce bureaucracy by, in obvious cases, beneficial owners being automatically entered from public registers. A typical example, according to the material, is the sole shareholder of a limited liability company.
The Chamber of Deputies confirmed the higher tax advantage for donors
Donors from individuals and companies, who send money to charity, will probably receive a higher tax benefit for last year and this year. They will be able to reduce their income tax base by up to 30 percent due to the gifts they provide. An amendment to the law, which was confirmed today by the Chamber of Deputies with a correction from the Senate, takes this into account. The amendment was presented in the Chamber of Deputies by ODS deputies and joined by their colleagues from the STAN, KDU-ČSL and TOP 09 clubs.
The Senate returned the draft to the deputies with an amendment. The reason was that the proposed change was incorrectly included in the law. Deputies today accepted the Senate’s proposal.
Until now, a natural person could reduce the tax base by 15 percent with a gift of at least 1,000 crowns or higher than two percent of the tax base. Companies can reduce their tax base by a tenth in the case of a gift of at least 2,000.
The benefits are to apply for last year and this year. It is intended to encourage donors to continue giving money to the non-profit sector, even in the difficult economic situation caused by the coronavirus pandemic.
The Chamber of Deputies approved the law on the examination of foreign investments
The Chamber of Deputies approved the law on the examination of foreign investments, which is to help the state better protect key Czech companies from unwanted takeovers by risky foreign investors. Today, MEPs rejected the Senate’s amendment, which proposed, among other things, that the review should also cover the supply of nuclear equipment from companies from countries outside NATO and the EU. The design was related to the construction of new units at the Dukovany nuclear power plant. The approved law in the House version will now be signed by the President.
Amendments in the Senate were presented last December by pirate senator Lukáš Wagenknecht. According to him, a foreign investor from countries outside the EU and NATO should submit and document information about its real owners. He would have to ask for a check by the National Security Office. The verification would also apply to Czech companies that would be bought by foreign investors from third countries in the past five years. The verification would also apply to subcontractors.
The Minister of Industry Karel Havlíček (for YES) rejected the Senate proposal. According to him, it would harm those interested in foreign investment who would not be able to meet the required obligation.
The Act on the Examination of Foreign Investments is based on a regulation of the European Parliament and is adopted by other EU countries. The law is intended to give the state tools to defend against risky investors from third countries who could endanger the security or internal order of the country.
According to the government, foreign investors may also pose non-economic risks. This concerns investments in sectors that are strategic in terms of security and will allow third parties to gain control or at least sufficient influence over key elements of these sectors, or access to key and sensitive information.
The law is intended to control foreign direct investment actually carried out by entities from countries outside the European Union. In the event that the examined investment is evaluated as risky, the state will be able to influence its form by setting the conditions under which it can be made, or to prohibit or cancel this investment retroactively. The office in charge of the inspection will be the Ministry of Industry.
Investments in the most sensitive sectors, such as the armaments industry, critical infrastructure or the development and production of the most sensitive dual-use items, will need to be notified in advance and authorized by investors. All other investments can be made without a permit, but the state will also be able to check them, up to five years back.
Source: EuroZprávy.cz by eurozpravy.cz.
*The article has been translated based on the content of EuroZprávy.cz by eurozpravy.cz. If there is any problem regarding the content, copyright, please leave a report below the article. We will try to process as quickly as possible to protect the rights of the author. Thank you very much!
*We just want readers to access information more quickly and easily with other multilingual content, instead of information only available in a certain language.
*We always respect the copyright of the content of the author and always include the original link of the source article.If the author disagrees, just leave the report below the article, the article will be edited or deleted at the request of the author. Thanks very much! Best regards!