The Czech Republic is on course to have a GDP in line with other European Union member states by 2013 but may not benefit from a flat tax rate, according to new research.

A study by the French Centre for International Studies and Research (CERI) concluded that the Czech Republic is enjoying a period of strong growth as well as a foreign trade surplus and general stability, reports the Prague Daily Monitor.

In particular, the research also recognises that the country could be set to adopt the euro within the next three years, especially if it continues to implement a wide range of fiscal and budget reforms. Entering the eurozone is likely to considerably boost interest from foreign property investors as well as helping to support further economic growth.

However, the CERI has raised some concerns over the introduction of a flat rate of tax. Although similar systems have proved successful in a number of emerging EU states such as Slovakia and Latvia and have boosted overseas property investment, it is unclear whether such a tax would prove beneficial to the Czech economy.

In particular, the CERI warns that introducing a flat rate of around 17 to 19 per cent could undermine the country's economic stability and long-term prospects.

It is thought that the use of flat rate taxes in other EU countries has helped to encourage domestic enterprise and labour force numbers as well as attracting investors from overseas who are keen to ensure their profits are not subjected to high taxation rates.