• Service: Tax, International Executive Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 7/16/2013

Czech Republic - Proposed payroll tax changes; flood-related tax relief 

July 16: Proposed legislation in the Czech Republic would implement a new payroll tax regime that, if enacted, would have an effective date of 1 January 2015.

The proposed payroll tax system would be part of the single collection point legislation and, for many employers, could result in higher wage costs.

The Ministry of Finance submitted for public comments proposals on the implementation and administration of a payroll tax. One change would revise how the maximum payroll tax base would be determined for employers—e.g., employers would calculate tax base under one set of rules for their employees and another set of rules for the employer itself.

The employer’s tax base would be based on an “average wage” based on the number of employees, and not separately from the actual wage of each employee, as under current practice. This approach would effectively eliminate the employer’s maximum threshold for insurance premium payments and, in turn, lead to increased costs.

Read a July 2013 report [PDF 268 KB] prepared by the KPMG member firm in the Czech Republic: Financial Update (July 2013)

The KPMG report also includes discussions of the following items:

  • Flood damage tax relief provisions allowing corporate income tax and individual income tax relief, equal to the amount of actual damage caused by this year’s flooding to the taxpayer’s revenue-generating assets
  • A legislative proposal providing for 100% depreciation of tangible assets using the straight-line method over a 12-month period, for tangible assets in the first and second asset depreciation categories acquired between 1 July 2013 and 30 June 2014
  • Legislative proposals would concern the tax deduction for certain childcare centers

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