With effect from January 1, 2008, Act No. 261\/2007 Coll., on the Stabilization of Public Budgets (ZSVR), introduced so-called energy taxes into the Czech tax system as another type of indirect taxes.<\/p>\n
3 chapters of the Act are important for metallurgical processes:<\/p>\n
A new term Metallurgical process<\/strong> is introduced.<\/p>\n According to \u00a7 8 paragraph 1 letter e) part forty-fifth of the ZSVR, gas intended for use, offered for sale or used in metallurgical processes<\/strong> is exempt from tax.<\/em><\/p>\n According to \u00a7 8 paragraph 1 letter e) part forty-six ZSVR, solid fuels intended for use, offered for sale or used in metallurgical processes<\/strong> are exempt from tax.<\/em><\/p>\n According to \u00a7 8 paragraph 2 letter e) part forty-seven ZSVR, electricity intended for use or used in metallurgical processes<\/strong> is exempt from tax.<\/em><\/p>\n What lies beneath? By law, the price for energy also includes an ecological tax to support renewable sources. In the case of electricity, it is 28.30 CZK\/MWh, for natural gas 264.80 CZK\/MWh of combustion heat, and for solid fuels 8.50 CZK\/GJ of combustion heat.<\/p>\n The processes listed in \u00a78 are exempt from this tax. In point f) then metallurgical processes<\/strong><\/p>\n Tax administration is carried out by the Customs Administration of the Czech Republic, i.e. the Customs Administration is responsible for tax collection, as well as for approval of tax exemption.<\/p>\n However, as the pressure on companies and their demands for exemption from ecological tax is increasing, many problems arise with how to interpret the term Metallurgical Process<\/strong>. It has no definition in the legal system. There is only a statement that it refers to the production of metals listed in the CZ-NACE<\/strong> classification under code C 24 “<\/strong>Manufacture of basic metals<\/strong>“.<\/p>\n For clarification, NACE or CZ-NACE<\/strong> is the European classification of economic activities. The abbreviation NACE comes from the French nomenclature \u201cN<\/strong>omenclature S<\/strong>tatistique des A<\/strong>ctivites E<\/strong>conomiques\u201d.<\/p>\n Classifications of economic activities are constructed to disaggregate data that can only be associated with an activity unit (eg an individual plant or a group of plants forming an economic unit such as an enterprise). They provide the basis for the preparation of statistical outputs, various inputs to the production process (labor, material, energy, etc.), for capital formation and for the financial operations of these units.<\/p>\n If we look at CZ-NACE<\/strong> in more detail, the contradiction between the wording of Act 261\/2007 Coll. and CZ-NACE<\/strong> begins here. Section 24 contains the following definition: “Production of base metals, metallurgical processing of metals; foundry<\/strong>“. Compared to the definition in Act 261\/2007 Coll. there is therefore a significant difference, with a much broader interpretation. In the next classification, the detailed category is given, coded with subgroup numbers 24.1 to 24.5, with the number of individual Classes and Subclasses<\/strong>.<\/p>\n In addition to the CZ_NACE codebook, there is also the NACE Methodological Guide, rev. 2. She says:<\/p>\n Paragraph 11, page 4<\/strong>:<\/p>\n “Economic activity<\/strong> is the production of a certain product or service using a combination of means of production, labour, production procedures and intermediate products. Economic activities<\/strong> are therefore characterized by inputs, production processes and their outputs (goods or services)”.<\/em><\/p>\n Paragraph 12, page 4:<\/strong><\/p>\n “An activity, as defined for the use of NACE<\/strong>, may comprise either a single production process (e.g. weaving) or may consist of several processes<\/strong>, each of which is described in a different classification category (e.g. the manufacture of a car consists of different activities such as casting, forging, forming, assembling, painting, etc.). If the production process is organized as a series of individual activities within one statistical unit, the entire unified production process is considered to be an economic activity”.<\/strong><\/em><\/p>\n Therefore, if the casting produced by the foundry has one integrated process, then all the operations of this process will be part of one economic activity and will fall into the CZ-NACE, category code 24<\/strong>. But the production of a casting means the preparation and production of a mould, the preparation and production of a melt, transport of the melt to the casting place, casting into the mould, knocking the casting out of the mould, sandblasting, grinding<\/strong> and other operations aimed at creating a semi-finished product intended for sale.<\/p>\n Since CZ-NACE<\/strong> is followed by the CZ-CPA<\/strong> production classification, I have to take this classification into account as well. The acronym CPA<\/strong> comes from the term C<\/strong>lassification of P<\/strong>roducts by A<\/strong>ctivity. Production classifications are constructed in such a way as to divide production (products and services) that have common characteristics. They provide the basis for the preparation of statistics on production, business activity, consumption, foreign trade and transportation of these products.<\/p>\n Some terms are defined in the Methodical Guide for<\/strong> CZ-CPA<\/strong>, and I consider the following to be essential:<\/p>\n Semi-finished products<\/strong> are “Products which have undergone some processing but require further processing before they are ready for use<\/strong>“. They may be sold to other manufacturers or moved to subcontractors for further processing. Typical examples are raw metal castings, ready for sale or for further processing”<\/p>\n From this it can be concluded that in order for a product to be classified with a CZ-CPA<\/strong> number, it must be created by a CZ-NACE<\/strong> economic activity.<\/p>\n CZ-NACE, Methodological Guide, p. 4, paragraph 14<\/strong><\/p>\n When classifying according to the CZ-NACE <\/strong>classification, the type of ownership of the statistical unit does not matter, since this characteristic does not affect the economic activity. Units that perform the same economic activity are classified in the same NACE<\/strong> categories. It does not matter whether the unit is a commercial company, whether it is privately or state-owned, whether the parent company is owned by a foreign investor, or whether the unit has one or more headquarters<\/strong>. Therefore, there is no connection between NACE<\/strong> and the classification of units of the System of National Accounts (SNA) or the European System of Accounts (ESA).<\/em><\/p>\n What follows from this. If a product with CZ-CPA<\/strong> classification is created within one economic activity, according to CZ-NACE<\/strong>, then all operations that are part of one integrated procedure<\/strong> will be classified with the same CZ-NACE<\/strong> number.<\/p>\n This opinion is also supported by the statement of the Ministry of Finance. Even though Metallurgical processes<\/strong> do not have a legally defined definition, if they are classified under CZ-NACE<\/strong>, code 24<\/strong>, they are exempt from tax. These processes are:<\/p>\n\n