Prague - The popularity of offshore tax havens among Czech entrepreneurs is rising. The number of Czech companies based in fiscal paradises has increased from 8,000 in 2006 to 12,000 this year.
This results not only in lower tax revenues and tax dodging. Tax havens also serve to conceal the identity of company owners.
Czech officials are looking into Offshore Leaks data
One fifth of Czech companies' capital comes from tax havens
According to a report released today by Transparency International and Biznode, 3.6 percent of Czech companies are based in tax havens. In the past five years, these companies have won public contracts worth in total CZK 153 billion (EUR 6 billion) and received another CZK 3.3 billion (EUR 130 million) in EU aid. Furthermore, companies with hidden owners have won public contracts worth another CZK 38.5 billion (EUR 1.5 billion) over the same period.
The report says that the most popular tax haven for Czech businessmen is the Netherlands, the home to more than 4,000 Czech companies, followed by the USA and Cyprus, whose popularity is increasing. Since 2012, 78 Czech companies have moved their headquarters to Seychelles, another increasingly popular offshore havens.
Even many traditional Czech companies have headquarters in fiscal paradises.
The owners of the Pilsner Urquell brewery, the Bata footwear company and the Skoda Auto carmaker are based in the Netherlands, while the owners of the Svijany brewery and the Skoda Transportation engineering company are based in Cyprus. Various Czech manufacturers of glass products are based in the Cayman Islands.
Madeta, Unipetrol, Home Credit, Ikea or a minority shareholder of Czech energy giant CEZ are all based in offshore tax havens too.
Some of these companies are even linked to Czech politicians.
Until this June, Labor Minister Frantisek Konicek from the SPOZ party was the board chairman at Equity Brokers, whose majority owner is hidden behind a Cyprus-based company. Konicek's wife is a part owner of Equity Brokers.
Equity Brokers owns Armaturka Krnov, which supplies products to state-run companies such as Cepro, Mero, or CEZ.
President Milos Zeman's chief adviser Martin Nejedly, deputy chairman of the SPOZ party, is an executive at Lukoil Aviation Czech, a company whose majority owner is based in the Netherlands. Nejedly is also the board chairman of ENE Investment, another anonymous company.
