Law and regulation of industrial and logistics investment in the Czech Republic

In the Czech Republic, the manufacturing and processing industry can benefit from incentives in the form
of corporate income tax relief, cash grants for job creation, and cash grants for training. Further, large-scale “strategic” investments can further benefit from cash grants for the acquisitions of assets. The eligibility for incentives depends on a number of factors, including the value of the investment, the number of jobs created, the region where the investment is located and the type of industry. There are currently no legal incentives for investments specifically for the logistics sector.

2. General incentives, from which investors in the I&L sector in CEE-17 can benefit, if no specific ones are available

In addition to the incentives aimed specifically at the manufacturing sector, investors in the Czech Republic can further benefit from support for research and development and support for “strategic services”, for example, software development centres, data centres, high-tech repair centres, and centres of shared services. The incentives are provided in the form of corporate income tax relief, cash grants for job creation and cash grants for training.

Large-scale "strategic" investments may further benefit from cash grants for acquisitions of assets. The eligibility for incentives depends on a number of factors, including the value of the investment, the number of jobs created, the region where the investment takes place and the type of industry.

Specific subsidies apply in certain regions where unemployment rates are higher than 7.5% and certain selected areas including Mošnov, Holešov and Most-Joseph.

3. Available tax exemptions or preferences for investors specifically in the I&L sector in CEE-17

Corporate income-tax relief is available for investors in the Industrial&Logistics sector.

4. General tax exemptions or preferences for investors in CEE-17 that would apply to the I&L sector

CIT relief is available for most eligible investments. The maximum amount of all incentives depends on the size of the investment (the programmes distinguish between regular investments and larger scale “strategic investments”), and it further depends on the size of the entrepreneur.

The aggregate maximum amount of support (the sum of the CIT tax relief and various cash grants, as may be applicable) provided for an investor is calculated as a percentage of all eligible costs: Large enterprise – 25%; Medium enterprise – 35% and Small enterprise – 45%.

The eligible costs are expenditures for assets of which at least 50% has to be for new equipment. Please note that no subsidies are provided in the Prague region.