Abstract:

Compared to standard business activities, a family business shows significant specific features derived, among others, from the connection of family members, family life and business activities. At the same time, these entities are traditionally described to be the backbone for the economies being more resistant to unfavourable conditions. In the Czech Republic the family businesses deserve extra attention now because of the first intergenerational succession that is currently taking place. This paper, which is an exploratory study in its nature, aims to identify and systematize the existing rules regulating family business (family crafts and family business corporations), with an emphasis put on the standards regulating family business succession. Key substantive tax acts, procedural rules as contained in the Tax Procedure Code, basic accounting regulation rules and regulation in the area of social and health insurance premiums were under investigation in this respect. The results of the conducted research prove that the Czech law-making body has not established a preferential tax regime for entities meeting the characteristics of a family business as currently defined in the Governmental Resolution of the Czech Republic. Some preferential clauses for family business as such can be, however, found in the Income Tax Act, which increasingly operates with family ties as one of the criteria for achieving certain tax benefits. In the context of the focus and the results presented therein, this paper can be seen and used as a basis for further research in the area of family business, focusing on the transition/transfer of a family business from the perspective of relevant private and public law rules.

Keywords:

Czech Republic, Exploratory Study, Family Business, Preferential Tax Regime, Taxes.

JEL Classification:

K34, K36, L26

How to Cite:

Karel Brychta. Specifics of Family Business from Tax Law Perspective with Emphasis on Selected Aspects of Intergenerational Succession – a Case of the Czech Republic. [ref]: vol.20.2022. available at: https://refpress.org/ref-vol20-a80/