The average wage in euros in the Czech Republic is 1,368 euros (CZK 34,932), which is the highest value among the Visegrad Four countries (V4). The highest average wage in the whole of Central and Eastern Europe is in Germany, namely 3978 euros (101,578 CZK). It is followed by Austria with 3108 euros (79,363 CZK). The lowest average wage of 400 euros (CZK 10,214) is in Kosovo and 432 euros (CZK 11,031) in Ukraine. This is the result of an annual study by the consulting company Mazars, which compares the tax systems of 21 countries in Central and Eastern Europe. According to data from the Czech Statistical Office, the average wage in the Czech Republic in the first quarter of this year rose by 3.2 percent year on year to 35,285 crowns.
According to the study, the average level of wages in euros has increased the most in the private sector. In Germany by 14 percent and by five to ten percent in Slovakia, Croatia, Latvia and Northern Macedonia. In Poland the average wage is 1331 euros, in Hungary 1147 euros and in Slovakia 1113 euros.
The study also states that taxes and compulsory employers’ contributions related to people’s employment have rather decreased in 21 European countries this year. On average, the ratio of employer’s costs to gross wages for taxes and compulsory levies is 15 percent. However, there are differences between countries. While in Romania the levies are less than five percent of gross wages, in Slovakia it is 35.2 percent. The Czech Republic is the country with the second highest rate in the region, namely 33.8 percent.
“As for the economic impact of the pandemic, so far it seems that most governments in the Central European region have decided not to finance employment and business support programs through tax increases. Some governments have even decided to reduce the tax burden. will have a significant long – term impact on state budget revenues, “said Pavel Klein, Lead Partner of Mazars’ Tax Department in the Czech Republic. According to him, in the future it can be expected that in connection with the pressure on public finances, the governments of individual countries will focus on the introduction of new taxes or intensified tax control in companies.
The study also shows that Hungary and Croatia have the highest basic VAT rates, at 27 and 25 percent, respectively. The average of the region is 21 percent, ie the same as in the Czech Republic. In Germany, the base rate is 19 percent.
In the case of corporate income taxes, Germany has the highest taxation, its maximum amount is 31 percent. By contrast, the lowest corporate taxes are paid in Hungary and Montenegro, at nine percent. The current corporate income tax rate in the countries of the region is between 15 and 20 percent, in the Czech Republic it is 19 percent. “Tax competition between countries is becoming increasingly apparent, despite the European Union’s efforts to minimize differences in corporate tax rates between Member States,” the study said.
The publication, in which, in addition to the V4 countries, Germany, Austria, Russia, Ukraine, southern European and Baltic states are represented, monitors mainly labor costs, indirect taxes, as well as various aspects of corporate taxation and transfer pricing.