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Dear Readers, Please find below our short news for November 2024:

• The Czech Social Security Administration Authority issued Information on a Bilateral International Treaty between the Czech Republic and the Federative Republic of Brazil on Social Security and an associated implementing document, the Administrative Arrangements, which came into force on 1 November 2024. 
   
• The Czech Social Security Administration Authority issued Information on a flood nursing benefit on 12 November 2024. The Information provides details for example about who can apply for the nursing benefit, under what conditions and in what way, and who is not entitled to that benefit. Additional information for employers can also be found on the website of the Ministry of Labour and Social Affairs here.
   
• The Czech Social Security Administration Authority issued Information about a possibility to apply for remission of penalty for failure to pay social security insurance premium or for a permission to pay outstanding insurance premium and penalty in instalments. The application can be filed by employers and self-employed individuals from the flooded regions.
   
• On 1 November 2024, the Ministry of Finance of the Czech Republic issued an updated version of an Accounting Bill, which is expected to come into force no earlier than from 1 January 2026.
   
• On 4 November 2024, the President signed Act No. 330/2024 Coll., on a Special Aid for Persons Affected by Floods in 2024 and on an Amendment to Act No. 111/2006 Coll., on Material Emergency Assistance, as subsequently amended (Parliamentary Press No. 824), effective since 8 November 2024.
   
• On 11 November 2024, the Ministry of Finance of the Czech Republic issued Information that a Double Taxation Treaty with Rwanda came into force as of 30 October 2024.
   
• The General Financial Directorate issued methodological guidance on the application of exemption pursuant to Section 4 (1) (n) and Section 9 (1) (g) and (i) of the Act on Real Property Tax, which has been effective since 7 November 2024.
   
• On 13 November 2024, the Financial Administration issued a statement reading that a taxpayer’s research and development activities, which are part of a research and development process chain, have to, on their own, meet statutory conditions for a tax deduction for research and development support.
   
• A bill to amend Act No. 256/2004 Coll., on Capital Market Businesses (Parliamentary Press No. 863), was submitted to the Chamber of Deputies on 20 November 2024. The proposed regulation is intended to transpose changes in the MiFID II Directive and the MiFIR regulation into Czech laws in order to simplify and harmonise the framework for security markets’ transparency. The bill is proposed to become effective from 29 September 2025 in compliance with Article 2 of the Directive.
   
• On 22 November 2024, an amendment to the Employment Act was approved by the Chamber of Deputies in the third reading (Parliamentary Press No. 743). The amendment contains, among other things, proposed introduction of a separate exemption for goods and services from medical facilities in the form of a non-monetary supply for employees, and proposed changes in the taxation and insurance premium payment mode in agreements to perform a job. The changes are expected to become effective from 1 January 2025.
   
• On 28 November 2024, the Financial Administration issued Information about a new tool, so-called Tax Echo, which has newly been used by the General Financial Directorate with the intention to improve tax administration and communication with taxpayers. The tool’s purpose is to improve voluntary compliance with tax obligations and to make collection of taxes more efficient.
   
• An amendment to the Energy Act passed the second reading in the Chamber of Deputies (Parliamentary Press No. 656). The amendment contains, among other things, proposed abolition of special depreciation of solar devices pursuant to Section 30b of the Income Tax Act. At present, the depreciation period is 240 months, and the amendment would result in a shorter period of depreciating certain devices acquired after the effective date. The amendment is planned to become effective on 1 January 2025. We are monitoring the legislative process for you and will keep you posted.
   
• The Working Committee of the Government Legislative Council has been discussing a draft decree, which is to amend Decree No. 441/2013 Coll., to Implement Act on Asset Valuation (the Valuation Decree), as subsequently amended. The amendment’s purpose is to bring nearer the identified and agreed price of immovable assets. The proposed valuation modifications are based on prices of immovable assets and development thereof in the market, which were obtained from the bank sector, the Czech Statistic Office, and additional sources. The draft decree is proposed to become effective from 1 January 2025. More information is available here.
   
• The Financial Analytical Office published a consolidated text of Act No. 253/2008 Coll., on Certain Measures against Money Laundering and Financing of Terrorism, which is planned to become effective as of 30 December 2024 and 1 January 2025. Details can be found here.
   
• The European Commission adopted a draft directive DAC 9 to be included in Pillar 2. The directive has to do with multinational enterprises (the MNE), which are required to file a Global Information Return. The purpose is to make compliance with duties under the directive easier for companies, and to define rules and procedures for a close mutual cooperation of tax authorities of EU countries. Member states will be obliged to implement the directive before 31 December 2025. As a result, they will be required to file the first report by 30 June 2026. More information is available here.
   
• On 5 November 2024, the EU Council approved a three-pillar package concerning changes in VAT, so-called VAT in the Digital Age (ViDA). The changes pertain to digital reporting, digital platforms and a uniform registration for VAT purposes. We have informed you about his proposal in our previous article here.
   
• The European Commission adopted Commission Regulation (EU) 2024/2862 dated 12 November 2024, which amends Regulation (EU) 2023/1803 as regards International Accounting Standard 21. Individual companies will begin applying the changes no later than on the first day of the first accounting period, which starts on 1 January 2025 or after that date.
   
• The Ministry of Finance issued four financial newsletters in November:
  • On 6 November 2024, they issued Financial Newsletter No. 10/2024, which informs about a Multilateral Convention about Implementation of Measures to Fight Tax Base Erosions and Profit Shifting in relation to tax agreements – regarding double taxation treaties with the Republic of Azerbaijan and the Government of the Kingdom of Bahrain.
  • On 7 November 2024, they issued Financial Newsletter No. 11/2024, which contains Instruction No. GFŘ-D-64 about location of a file or a relevant part thereof with tax offices and regional sites of tax offices.
  • On 14 November 2024, they issued Financial Newsletter No. 12/2024, which informs about a Multilateral Convention about Implementation of Measures to Fight Tax Base Erosions and Profit Shifting in relation to tax agreements – regarding double taxation treaties with the Government of Barbados and with Bosnia and Herzegovina.
  • On 25 November 2024, they issued Financial Newsletter No. 13/2024, which informs about a Multilateral Convention about Implementation of Measures to Fight Tax Base Erosions and Profit Shifting in relation to tax agreements – regarding double taxation treaties with the Government of the Hashemite Kingdom of Jordan and with the Republic of Kazakhstan.
     
• The European Commission issued an updated EU Common Customs Tariff, which comprises a combined nomenclature effective for 2025. The tariff can be found on the Customs Administration’s website here.
   
• Please be advised about the effective date of a restricted threshold for exemption of income from the sale of securities and investments, which is near. Effective from 1 January 2025, it will be possible to exempt income that meets the three-year/five-year time test in aggregate only up to CZK 40,000,000.

Stela Bartošová
bartosova@clarksonhyde.cz