Taxes
A license is granted if the operation of lotteries or other similar games is in compliance with other laws and provided that it does not disturb the peace and order, and further provided that the proper operation of lotteries or games is secured including the necessary equipment.
A portion of the profits, in the percentage rates as set forth in the following Table, ranging from 6 % (minimum) up to 20 % (maximum) of the difference, must be used for social, medical, sport, environmental, cultural or other projects beneficial to the public. Profit, in this context, means the amount by which the operator’s income, which is created by all betted amounts of all operated games, and which amounts are included in the account for the given fiscal period, exceeds the prizes disbursed to bettors, the administration fees, the local fees and the costs incurred in connection with state supervision.
Neither the operation of lotteries and other like games (nor the winnings from them) is subject to the income tax and the value-added tax. A licence is granted if the part of the proceeds specified by law is transferred to beneficial-to-the-public purposes.
The operation of lotteries and other similar games is deemed to include the activities aimed at organising and putting such lotteries and other similar games into operation, including the brokerage, organisational, financial, technical and other services related to the management of operation of such games as well as costs resulting from the termination of a specific game or lottery and accounting. Moreover, the operation of lotteries also includes the performance of any and all other activities that are prescribed to the operator by other legal regulations.
The tax duty regarding the other taxes and fees is determined in accordance with other respective tax laws. The Czech Republic’s corporate tax for the year 2005 is 26%.
LISTING
LEGISLATION ENACTED
Legislation
– Act No. 202/1990 of Collect., On Lotteries and other Like Games
– Act No. 61/1996 Coll., on some measures against the legalization of the proceeds of crime and on the amendment and supplementation of connected Acts
– Decree of Ministry of finance on monitoring of casino activities – Vyhláška 285/1998 Sb Ministerstva financí ze dne 26. listopadu 1998 o podmínkách monitorování a uchovávání záznamù v kasinu
– Decree of Ministry of finance on slot machines – Vyhláška č. 223/1993 Sb. ministerstva financí ze dne 28. července 1993 o hracích přístrojích
– Decree of Ministry of finance concerning registration of certain types of games – Vyhláška č. 315/1999 Sb. Ministerstva financí ze dne 1. prosince 1999 o způsobu oznamování soutěží, anket a jiných akcí o ceny, které nejsou spotřebitelskou loterií
– Tax Law Zákon č. 586/1992 Sb. o daních z příjmů
– Vat Law Zákon č. 235/2004 Sb. O dani z přidané hodnoty
– Act No. 500/2004 Coll. On administrative procedure
– Civil Code (No 40 /1964 Coll.)
– Penal Code (No.140/1961 Coll.)
– Other sources of gaming law are as follows:
1. Act No. 2/1969 Coll., on the Competences of Central Administration Authorities, as amended
2. Act No. 531/1990 Coll., on Territorial Financial Authorities, as amended
3. Act No. 455/1991 Coll., on Trade Licensing, as amended
4. Act No. 424/1991 Coll., on Association in Political Parties and Political Movements, as amended
5. Act No. 37/1995 Coll., on Non-Periodical Publications, as amended
6. Act No. 3/2002 Coll., on Freedom of Belief and on Status of Churches and Religious Corporations
7. Act No. 634/2004 Coll., on Administrative Fees, as amended
8. Act No. 565/1990 Coll., on Local Fees, as amended
9. Act No. 239/1992 Coll., on the State Cultural Fund of the Czech Republic
10. Act No. 241/1992 Coll., on the State Fund of the Czech Republic for the Support and Development of Czech Cinematography, as amended
11. Act No. 61/1996 Coll., on Some Measures against the Legalisation of Proceeds from Criminal Activities, as amended
12. Act No. 359/1999 Coll., on the Social and Legal Protection of Children, as amended
13. Act No. 227/1997 Coll., on Endowments and Endowment Funds, as amended
14. Act No. 169/1999 Coll., on Serving Prison Sentences, as amended
15. Act No. 99/1963 Coll., the Code of Civil Procedure, as amended
16. Act No. 41/1993 Coll., on the Certification of Conformity of Transcripts or Copy with a Document, and on the Authentication of Signature by District and Municipal Authorities, and on the Issuance of Certificates by Municipal and District Authorities, as amended
17. Decree of the Ministry of Transport and Communications No. 272/2000 Coll., on the Authentication of Signature or on the Certification of Conformity of Transcript or Copy with a Document by Ship Commander
18. Decree of the Ministry of Justice No. 196/2001 Coll., on Fees and Compensation for Notaries and Administrators of Probate Estates, as amended
BARRIERS
A lottery or a similar game of chance shall be deemed according to the Act No. 202/1990 of Collect., On Lotteries and other Like Games all games in which players become entitled to a cash prize or other prize of pecuniary value in return for paying cash or providing pecuniary value, in case definite conditions occur.
Only a legal entity, which has its registered address in the territory of the Czech Republic, and which was granted the license to operate a lottery or other like game by the competent authority, may run a lottery or other like game.
Lotteries and other like games may be operated only on the grounds of the license issued by the competent authority. If a lottery or other like game is operated by the state, the Ministry or a state agency thereby appointed shall act on its behalf.
The license is granted if the operation of lotteries or other like games is in compliance with other laws and provided that it does not disturb the peace and order, and provided that a proper operation of lottery or game is secured including the necessary equipment and if for social, medical, sport, environmental, cultural or other projects beneficial to the public it is used a portion of the profit, at the percentage rate ranging from 6 % (minimum) up to 20 % (maximum) of the difference, by which the operator’s income, which is created by all betted amounts of all operated, and which are subject to accounting in the given fiscal period, exceeds the prizes disbursed to bettors, the administration fees, the local fees and the costs incurred by the state supervision.
A lottery or other like game (in particularly number lotteries, cash or merchandise lotteries, and instant lotteries) may be operated by the state (the Ministry or other governmental entity charged by the former), a joint stock company with registered address in the territory of the Czech Republic, all shares of which are registered shares (on name) and has been established for the operation of lotteries and other like games. The registered capital of such company is at least CZK 100,000,000.- (approx. 3.571.430.- €) and it may not be reduced below the minimum amount in the course of the time of the validity of the license.
Betting games operated with the use of a special type of tokens may be operated by a joint stock company with registered address in the territory of the Czech Republic, all shares of which are registered shares (on name), and which has been established for the operation of lotteries and other like games. The registered capital of such company is at least CZK 30,000,000.- (approx. 1.071.430.- €) and it may not be reduced below the minimum amount in the course of the time of the validity of the license.
Betting games with which the prize winning is conditioned by the successful guess of the outcome or may be operated by a joint stock company, all shares of which are registered shares (on name), and which has been established for the operation of such games, and the registered capital of which is at least CZK 10,000,000.- (approx. 357.142.- €) and CZK 30,000,000.- (approx. 1.071.430.- €) for casinos. The registered capital may not be reduced below the respective minimum amount in the course of the time of the validity of the license.
The operation of foreign lotteries including the sale of foreign lottery tickets, participation in betting abroad, with which the wagers are paid abroad, and the collection of wagers for betting games operated abroad or the mediation of wagers for betting games operated abroad, are prohibited. The operation of the Czech lotteries and other like games, with which the wagers are paid abroad, is prohibited. The Ministry may grant an exemption from this ban in order to ensure mutuality.
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