Czech Republic29 Aug 2013
The Czech Republic is a central element of ‘Emerging Europe’, with a population of more than 10 million, a middle-ranking economy with GDP of nearly US$300bn and good prospects for growth. However, the country has suffered from the continuing effects of the global recession and recent political uncertainty has added to the fragility of any putative economic recovery.
There is a stable and essentially prosperous economic base that is has become well integrated into the EU since accession in 2004; however, this means that, being relatively export-centered, it is particularly sensitive to market fluctuations in the EU countries that form its main export markets, the most important of these being Germany. When these markets fell into recession in 2008-09, the effect on the Czech economy was severe, and although signs of a slow revival appeared in 2010 and continued through 2011, backed by a relatively robust banking system, a renewed drop in export demand led to a return to recession in 2012 that is proving hard to climb out of.
This Country Survey aims to provide a balanced view of the equipment finance and auto leasing market in the Czech Republic. The survey covers the following areas:
- A summary of Czech leasing activity;
- The current economic climate and the incentives for and constraints on doing business in the Czech Republic;
- Insights from key industry figures on the market, its outlook and the challenges and opportunities that face it;
- The latest developments in taxation of leases, including thin capitalization and VAT; and
- An outline of the differences between Czech accounting standards for leases and IFRS.