• Service: Tax, Global Transfer Pricing Services, Global Mobility Services, International Tax
  • Type: Regulatory update
  • Date: 6/16/2014

Czech Republic - Income tax law changes are proposed 

June 16: The Ministry of Finance released for comments a draft amendment to the income tax law of the Czech Republic.

Among the proposals in the draft bill are measures that would:

  • Continue the tax base and tax rates for individual income tax, with the effect that the “super-gross salary and a solidarity tax surcharge” would continue to apply
  • Repeal or limit tax exemptions of certain employee benefits
  • Introduce a requirement for individuals to report the amounts of their tax-exempt income exceeding a certain threshold amount
  • Amend the transfer pricing rules to limit an option to reduce the tax base unless settlement between the related parties is simultaneously reached
  • Propose a new tax exemption for income in the form of a property benefit acquired free of charge (i.e., interest-free loans)
  • Limit the current income tax rate of 5% that applies for investment funds to only certain “basic investment funds”—including investment funds in the form of a mutual fund, a trust, and certain other funds, depending on the structure of their investors
  • Provide that a finance lease payment is to be considered a tax-deductible expense when certain arm’s length standards are satisfied
  • Impose stricter conditions on when expenses can be considered tax-deductible

Read a June 2014 report prepared by the KPMG member firm in the Czech Republic: Financial Update – June 2014

This KPMG report also includes discussions concerning the following topics:

  • Employment cards introduced by an amendment to the Act on the Residence of Foreign Nationals
  • Deadline for recording shares in book-entry form applicable to producers of electricity and heat from renewable resources is set to expire at the end of June
  • Directive on the enforcement of regulations relating to the posting of workers
  • What’s new in subsidy programmes

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