Blog

Dear Readers, Please find below our Short News for December 2024:

• On 3 December 2024, Decree No. 370/2024 Coll., which amends Decree No. 441/2013 Coll., on Implementation of the Act on Property Valuation (the Valuation Decree), as amended, was published in the Collection of Laws, coming into effect on 1 January 2025.
   
• An amendment to the Act on Financial Market’s Digitalisation (Parliamentary Press No. 692) passed the third reading in the Chamber of Deputies on 6 December 2024. This amendment’s purpose is to implement EU regulations in the area of digital finance (the DORA and MiCA regulations). The law was proposed to become effective on 30 December 2024, with certain provisions coming into effect on 17 January 2025 to follow upon the effect of applicable EU regulations. 
   
• On 10 December 2024, Act No. 395/2024 Coll., which amends Act No. 187/2006 Coll., on Sickness Insurance, as amended, as well as additional related laws, was published in the Collection of Laws. The law became effective on 1 January 2025, with the exception of several points that come into effect on 1 July 2025 and 1 January 2026.
   
• In the context of the previous paragraph, the Czech Social Security Administration Authority (the “CSSAA”) issued a notice of digitalisation of additional sickness benefits, which has been in progress and will be launched as of 1 January 2025. As a result, the CSSAA will receive filings from attending physicians and employers electronically from the New Year, and this procedure will apply to monetary maternity allowances, nursing benefits and long-term nursing benefits, paternal allowances and the balancing maternity allowances. More information about eDávky (e-Allowances) can also be found here.
   
• An amendment to the Act on Provision of Child Care Services in a Children Group (Parliamentary Press No. 716) was approved in the third reading on 20 December 2024. In terms of amending proposals, this amendment also involves taxation moments in option and stock plans and tax support for old-age saving products.
   
• Act No. 417/2024 Coll., which amends Act No. 155/1995 Coll., on Pension Insurance, as amended, and additional related laws, was published in the Collection of Laws. The law became effective on 1 January 2025, with the exception of several provisions that come into effect on a later date.
   
• On 18 December 2024, Government Regulation No. 471/2024 Coll., on the Highest Amount of the Contribution to Support Employing Physically Disabled Individuals on the Protected Labour Market was published in the Collection of Laws. This regulation will become effective on 1 April 2025.
   
• On 19 December 2024, Decree No. 475/2024 Coll., on a Change in the Rate of the Primary Compensation for the Use of Road Motor Vehicles and Subsistence Allowances, and on Determining an Average Price of Fuels for the Purpose of Providing Travel Reimbursements for 2025, was published in the Collection of Laws, coming into effect on 1 January 2025.
   
• Decree No. 474/2024 Coll., on Determining the Level of Lump-Sum Reimbursement of Costs in Working Remotely for 2025, was published in the Collection of Laws on 19 December 2024. The decree came into effect on 1 January 2025.
   
• Decree No. 373/2024 Coll., on Determining the Level of Primary Rates of Foreign Subsistence Allowances for 2025 was published in the Collection of Laws.
   
• On 20 December 2024, the Ministry of Foreign Affairs published Communication No. 439/2024 Coll., on Additional Czech Republic’s Notices about the Multilateral Treaty on Implementation of Measures to Fight Reductions in the Tax Base and Shifting of Profits in Relation to Tax Contracts.
   
• On 27 December 2024, Act No. 470/2024 Coll., which amends Act No. 435/2004 Coll., on Employment, as amended, and certain additional laws, was published in the Collection of Laws. As part of the Act on Income Taxes, a separate threshold for exemption of medical employee benefits will be introduced together with a new threshold at 25% of the average salary for the purposes of taxing and paying insurance premiums in agreements to complete a job. The law was to come into effect on 1 January 2025, except for Part VII effective since 31 December 2024, and Part V, Chapters 4 through 12, effective from 1 January 2026. Basic information about the changes can also be found here.
   
• An amendment to Act No. 235/2004 Coll., on Value Added Tax, as amended, published as Act No. 461/2024 Coll., was announced in the Collection of Laws, coming into effect on 1 January 2025. Effect of certain provisions has been deferred. Background information is available here.
   
• In connection with a planned amendment to the VAT Act, the Financial Administration published Information about modifications in forms for value added tax: two registration rows, 14 – Correction of the Tax Base, and 48 – Correction of the Tax Deduction pursuant to Section 74a, will be added.
   
• The Financial Analytical Office published Information about a change in reporting a contact person effective from 1 February 2025 in connection with the effect of an amended text of Section 22 of the AML Act. The existing obligated person has to comply with the duty to report a contact person under the new regime within the deadline of 30 days from the effect of a Ministry of Finance’s Decree, i.e. from 1 February 2025. As a result, 3 March 2025 will be the final date of that deadline.
   
• The Financial Analytical Office published a consolidated text of Decree of the Czech National Bank No. 67/2018 Coll., on Certain Requirements for a System of Internal Principles, Procedures and Inspection Measures against Money Laundering and Funding of Terrorism. The decree came into effect on 30 December 2024. More information can also be found here.
   
• The Financial Analytical Office published an updated Methodological Instruction No. 8 – Copying Identity Cards for the Purposes of the AML Act, which comes into effect on 1 January 2025.
   
• The Chamber of Deputies approved an amendment to the Energy Act (Parliamentary Press No. 656), which, among others, contains a proposal to cancel special depreciation charges for solar facilities pursuant to Section 30b of the Income Tax Act. This amendment is planned to come into effect on 1 January 2025.
   
• On 10 December 2024, the EU Council approved the FASTER Directive (Faster and Safer Relief of Excess Withholding Taxes). This Directive’s purpose is to enhance reliability and efficiency of procedures in the area of withholding taxes in the EU for cross-border investors, in-land tax authorities and financial mediators such as banks or investment platforms. This Directive will come into effect on 1 January 2030. As a result, the member states should transpose this Directive into their national laws by 31 December 2028.
   
• The Ministry of Finance of the Czech Republic issued eight Financial Newsletters in December:
  • On 2 December 2024, they issued Financial Newsletter No. 14/2024, which, following upon the Multilateral Treaty on Implementation of Measures to Fight Reductions in the Tax Base and Shifting of Profits in Relation to Tax Contracts, informs about Double Taxation Treaties with the Governments of Malaysia and Mongolia;
  • On 6 December 2024, they issued Financial Newsletter No. 15/2024, which, following upon the Multilateral Treaty on Implementation of Measures to Fight Reductions in the Tax Base and Shifting of Profits in Relation to Tax Contracts, informs about Double Taxation Treaties with the Republic of Panama and the Government of Saudi Arabia;
  • On 10 December 2024, they issued Financial Newsletter No. 16/2024, which contains a List of Reported States pursuant to Section 14zm (1) (c) of Act No. 164/2013 Coll., on International Collaboration in Administering Taxes, and on an Amendment to Other Related Laws, as amended, an authorised body of which signed a document to implement international treaties concerning automated exchange of information reported by platforms’ operators, just as the authorised body of the Czech Republic did. This list will be applied from 1 January 2025;
  • On 12 December 2024, they issued Financial Newsletter No. 17/2024, which contains deadlines of tax liabilities (a tax calendar) for 2025. The calendar also includes liabilities concerning the FATCA/CRS Certifications, CbCR, and CbCR and DAC6 Reports, as well as certification and a registration application under DAC7;
  • On 12 December 2024, they issued Financial Newsletter No. 18/2024, which, following upon the Multilateral Treaty on Implementation of Measures to Fight Reductions in the Tax Base and Shifting of Profits in Relation to Tax Contracts, informs about Double Taxation Treaties with the Royal Government of the Kingdom of Thailand and the Government of the Republic of Tunisia;
  • On 17 December 2024, they issued Financial Newsletter No. 19/2024, which brings an overview of types of taxes and parts thereof, on which tax offices keep personal tax accounts, on which payments are received from taxpayers, and information about how to properly pay taxes to tax offices in 2025;
  • On 20 December 2024, they issued Financial Newsletter No. 20/2024 which, following upon the Multilateral Treaty on Implementation of Measures to Fight Reductions in the Tax Base and Shifting of Profits in Relation to Tax Contracts, informs about Double Taxation Treaties with the Government of Ukraine and the Government of the Socialist Republic of Vietnam; and
  • On 31 December 2024, they issued Financial Newsletter No. 21/2024, which contains a List of States, in which the reciprocity principle has been complied with as of 1 January 2025 in relation to the return of value added tax to a foreign entity pursuant to Section 83 of Act No. 235/2004 Coll., on Value Added Tax, as amended as of 1 January 2025.
  •  
• A listing of valid double taxation treaties with updated texts can be found on the website of the Ministry of Finance of the Czech Republic here.
   
• Please be advised that a notification of entering into the lump-sum mode for self-employed individuals can be filed until 10 January 2025. The level of a monthly lump-sum tax advance for 2025 is as follows: Tier I: CZK 8,716; Tier II: CZK 16,745; and Tier III: CZK 27,139. More information is available on the Financial Administration’s website here.
   
• On their website, the Financial Administration informed about a change in the VAT rate in Slovakia, which becomes effective on 1 January 2025.
   
• The CSSAA issued a Summary of Key Social Security Data in 2025, which relates to both pension and sickness insurance, i.e. pensions, sickness insurance allowances, social security for self-employed individuals and social security insurance premiums and the state employment policy contribution.
   
• Please be advised of changes in coefficients in tax on immovable assets for the taxation period of 2025 that will soon become effective. You can find more details in the Information of the Financial Administration here and here.

Stela Bartošová
bartosova@clarksonhyde.cz