Blog

Dear Readers,

Please find below our short news for May 2024:

• Draft amendment to the Act on Investment Companies and Investment Funds (Parliamentary Press No. 570) was delivered to the President for signature on 31 May 2024. This draft also includes an amendment to the consolidation package containing for example modifications to benefits’ taxation or to insurance premium for employee shares and options, or stipulation of non-monetary income’s valuation in using a pre-school facility. A change was also made in a disputable regulation of agreements to perform a job: a new system will apply to these agreements in the “notified agreement” mode from 1 January 2025. We will bring you more information about the changes in a dedicated article.
   
• An amendment to the Act on Transformation of Corporations and Cooperatives (Parliamentary Press No. 459) was delivered to the President for signature on 31 May 2024. Details are available in one of our previous articles.
   
• Regulation No. 117/2024 Coll., on Specifying Electronic Communication for Discharge of Employers’ Duty to Inform in Employing Foreign Employees, was published in the Collection of Laws. The regulation specifies the format, content and structure of a data message and will come into force on 1 July 2024.
   
• A Double Taxation Treaty with the United Arab Emirates came into force on 13 May 2024.
   
• The Ministry of Finance published draft amendment to the Act on Income Taxes, which responds to a new accounting bill. It will be possible to use profit or loss for the purposes of the tax base, but appropriate modifications will have to be made. Taxation period will newly be completely linked to the accounting period. A term “tax value of assets, receivables and outstanding amounts” will newly be defined, technical improvement will be replaced by the term “additional improvement”, and the definition of the latter term will also be modified. The draft amendment will seek to simplify tax depreciation and amortisation through cancellation of depreciation/ amortisation groups, the threshold for tax depreciation/amortisation will be increased to CZK 100,000, and three primary depreciation/amortisation periods will be introduced. The user will be able to amortise an asset in the form of the right of use with the subsequent purchase for the tax purposes (finance leases) where defined conditions will be met. The tax mode in outstanding social security and healthcare insurance and contractual penalties will no longer be tied to the payment, accounting recognition being the key aspect.
   
• The Ministry of Finance is preparing an amendment to the Tax Code; most changes should come into force on 1 July 2025. The amendment proposes a possibility of penalty remission in full (the current limit is 75%), introduces the fiction of delivery in informal communication with a tax administrator (e.g. by email), or extends the duty to inform in relation to the tax administrator.
   
• The Ministry of Finance has submitted a draft amendment to the Act on Excise Taxes (here).
   
• The Financial Administration published Financial Newsletter No. 4/2024 – a communication on the treaty against double taxation and on prevention of tax evasions in the area of income tax and property tax  between the Governments of the Czech Republic and  the Belarusian Republic.
   
• Please be advised that the deadline for submission of a request for VAT refund for 2023 for persons established outside the EU will soon expire. The deadline for the request’s submission expires on 30 June 2024 (and cannot be extended); after the deadline’s expiry, the entitlement to the refund will cease to exist.

Michaela Kozminská
kozminska@clarksonhyde.cz