Press Release: Direct taxation: The European Commission requests that the Czech Republic end discriminatory taxation of non-resident taxpayers

The European Commission formally requested that the Czech Republic change its tax provisions, which tax certain non-residents' income of Czech origin on a gross basis, whereas residents may deduct expenses related to the same income. The Commission considered that these rules are incompatible with the EC Treaty, which guarantees the freedom to provide services and the free movement of capital. The request took the form of a reasoned opinion (second step of the infringement procedure provided for in Article 226 of the EC Treaty). If there is no satisfactory reaction to the reasoned opinion within two months, the Commission may decide to refer the matter to the Court of Justice of the European Communities.