CMS Tax Connect e-Guide: Tax regimes in Central and Eastern Europe May 2012
CMS is extremely proud of its tax expertise in Central and Eastern Europe, which is among the best in the region. This expertise is a key part of our offering in Europe and a vital step in becoming the best European provider of legal and tax services. The CMS Tax Connect guide to tax regimes in Central and Eastern Europe offers a unique overview of the tax systems of 12 countries.
Each country is introduced through a “Tax at a glance” section. Here, we have compiled the key tax facts which you need to know. The country files then deal with the basic points of the tax system in question and provide an overview of the most important features of the system. These country files are a highly convenient, simple way of getting an idea of the basics, so that you know what to ask in a discussion of your specific business situation.
The primary value of the country files lies in the overview they give of the region. This makes them indispensable for exploring the trends and policies that characterise the tax systems in CEE. For instance, you will learn that it is unusual to have a general corporate income tax rate of over 20%. The two exceptions are Ukraine and Austria, and in Ukraine the 21% rate is to be decreased to just 16% within the next two years. This is a fact worth noting amidst the drive to reduce budget deficits, because it proves that tax competition and the “race to the bottom” is far from over. On the contrary, the region is increasing its efforts to attract foreign investors in order to boost its economies.
Also of interest is the increase in VAT rates. No country in the region has a general VAT rate below 18%, with more and more countries tending towards the mid-20s. It may come as a surprise to some that Hungary has decided to increase its general rate to 27%. These higher tax rates offer a never-before-seen incentive to make VAT optimisation within a multinational company the highest priority.
At CMS, we understand that our clients would prefer not to have to deal with each jurisdiction in the region individually. That is why all our tax personnel – who work across the region as a team – are trained in international tax matters and can coordinate projects across jurisdictions, whether they are based in Ljubljana, Zagreb or Sofia. In this way we can deliver the seamless service which our clients value so highly.
CMS does not operate out of “virtual offices”. Our tax personnel are local experts and professionals working in offices from Moscow to Vienna, Sofia to Warsaw, and Zagreb to Kyiv. This ensures that you have access to the hands-on experience and language skills you will need in the region, in order to communicate with the tax authorities effectively and resolve any tax issues that may arise quickly.
We trust that you will find this Tax regimes in Central and Eastern Europe e-Guide useful. Do not hesitate to contact your dedicated CMS tax lawyer for more information on our Central and Eastern Europe tax capacity.
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