Publication of the Use of 2% Tax in the Commercial Bulletin

The obligation you are referring to is established in Section 50, paragraph 13 of Act No. 595/2003 Coll. on Income Tax, as amended (hereinafter the “Income Tax Act”). The obligation to publish a precise specification of the use of received shares of income tax from individuals and legal entities in the Commercial Bulletin applies to recipients who have received tax shares according to the annual overview of recipients of the paid tax shares, available here, in a total amount exceeding EUR 3,320.

In such cases, the specification published in the Commercial Bulletin must include, in particular, the amount and purpose of the use of the tax share, the manner of use of the tax share broken down by the amount and type of expenses directly related to the purpose for which the tax share may be provided to the recipient according to the Income Tax Act, the amount and type of expenses directly related to the operation of the recipient, and the auditor’s opinion if the recipient is required to have its financial statements audited by an auditor. The deadline for publishing the notice in the Commercial Bulletin is 16 months from the date of publication of the annual overview of recipients.

Stricter obligations are set out in the Income Tax Act for recipients whose total received shares of income tax in the relevant calendar year exceeded EUR 33,000. Such a recipient is, according to Section 50 paragraph 13 of the Income Tax Act, “obliged to establish a separate bank account or a branch of a foreign bank within 30 days of receiving this amount, on which only the receipt and drawing of the paid tax share is recorded, whereby the funds corresponding to the paid tax share received in the relevant calendar year before the said period, reduced by amounts already used, shall be transferred to this account within 30 days from the obligation to establish it. The recipient is obliged to report the account number to the notary annually for certification purposes when proving compliance with the condition under paragraph 6 letter h) (note: the condition for the tax administrator to allocate the tax share). Interest from funds on the separate account, reduced by withholding tax… and paid costs related to maintaining this account, shall be used by the recipient only for purposes (for which the tax share may be provided to the recipient according to the Income Tax Act) which are the subject of its activities.”

The foundation also has other obligations, especially the duty to prepare and publish the foundation’s annual report and to maintain the amount of the foundation’s endowment; otherwise, there is a risk of sanction in the form of dissolution of the foundation due to inactivity.