Blog

Dear Readers,

please find below our short news for September 2024:

• On 18 September 2024, the Financial Administration issued information concerning a natural disaster (flooding and high water), which hit the territory of the Czech Republic. You can read more information in our article here.

• In connection with the flooding, the Financial Administration issued information on 27 September 2024 on remission of a fine for failure to lodge a review statement. The fine’s remission applies to payers whose lodging deadline falls on the period from 12 September 2024 through 31 October 2024, if the duty is discharged no later than on 25 November 2024. Detailed information is available in Financial Newsletter No. 7/2024.
   
• The Czech Social Security Administration Authority also responded to the flooding, specifically by issuing information about a possibility to file an application for a nursing allowance in the event of elementary schools’ closure and about providing for cash payments of pensions and sickness benefits in affected regions. In another press release, this authority informs about an option for employers and self-employed individuals to file an application with the competent District Social Security Administration Office for remission of penalties for failure to pay social security insurance premium. The remission will be applied on the basis an assessment of the reasons submitted by the applicant, rather than automatically.
   
• A bill on digital finance (Parliamentary Press No. 694), the purpose of which is to implement EU regulations in the digital finance area (the DORA and MiCA Regulations), went through the second reading. The law will regulate torts and powers of the Czech National Bank concerning crypto-asset services.
   
• An amendment was proposed during discussions on EU implementation guidance in the digital finance area (refer to the previous section) to supplement the Income Tax Act with an exemption of income from a crypto-asset’s transfer for consideration under similar conditions that apply to securities. The amendment introduces a general three-year time test and, in addition to this, an exemption value threshold in the amount of CZK 100,000. The aggregate exemption threshold in the amount of CZK 40 million for sales of securities and investments (effective from 1 January 2025) should be expanded to also cover sales of crypto-assets. We are monitoring the legislative procedure for you and will keep you posted.
   
• An amendment to the Value Added Tax Act went through the second reading (Parliamentary Press No. 726). The amendment will have a major impact on the real estate industry, and we included a short summary thereof in one of our previous articles. We are monitoring the legislative procedure for you and will bring you any updates.
   
• A government bill, which amends certain laws in the area of tax administration and the competence of the Customs Administration of the Czech Republic (Parliamentary Press No. 784), was submitted to the Chamber of Deputies. Majority of the changes are expected to become effective on 1 July 2025. An amendment to the Tax Code accounts for a major part. Changes should be made in the area of interest where “interest on interest” paid by the tax administrator will be eliminated, or penalty’s remission will be extended to 100% (from the existing 75%). The amendment also contains a new concept of collective remission or deferral of tax or accessories thereof and an explicit confirmation of a possibility to apply the Tax Code also to “other than tax” agendas. We are monitoring the legislative procedure for you and will keep you posted.
   
• The Ministry of Finance submitted a draft decree, which is to amend certain decrees on submissions presented in forms. This is to apply primarily to individual income tax, value added tax and road tax. The decree is anticipated to come into force on 1 January 2025.
   
• The Ministry of Labour and Social Affairs submitted a draft government regulation on a coefficient for the calculation of a minimum wage in 2025 and 2026. The coefficient for 2025 and 2026 should be 0.422 and 0.434, respectively. The minimum wage should grow to CZK 20,600 and CZK 22,100 in 2025 and 2026, respectively. The regulation will become effective one day after the promulgation thereof. 
   
• The Ministry of Finance submitted a draft decree on determining the level of the basic rate of foreign meal allowances for 2025. The proposed changes include an increase in 38 items and a change to EUR from the USD in 7 items. The draft, including the rates, is available here. The effective date should be 1 January 2025.
   
• The Government passed an amendment to the Labour Code. Key changes include a change in the notice period, an extension of the probation period, regulation of employing parents of small children, and an option of paying a wage in a foreign currency. Significant changes can be expected due to the legislative process, which we are monitoring for you and will keep you informed about.
   
• As of 1 October 2024, Act No. 252/2024 Coll., Amending Act No. 182/2006 Coll., on Bankruptcy and Methods of Resolving It (the Insolvency Act) takes effect. Legislative changes can only be applied to new insolvency proceedings.
   
• The Financial Administration draws attention to the forthcoming expiration of tax stamps, which can only be used until 31 December 2024. Unused stamps can be returned to selected offices of the Czech Post until 31 December 2024. The whole report is available here.
   
• The Financial Administration published information about templates of confirmations of the level of a contribution for tax-assisted old-age saving plans and long-term care insurance products for the purposes of applying a deduction from the individual income tax base. The intention is to standardise the confirmations’ content and the procedure in proving the entitlement to a deduction of non-taxable portions of the tax base.
   
• The Court of Justice of the EU issued Press Release No.126/24, which informs that substantial changes in procedural rules of the Court of Justice and the General Court will become effective on 1 September 2024.
   
• The deadline for filing applications for a group’s registration pursuant to Section 95a of the VAT Act (registration valid from 1 January 2025), and applications for a group registration’s cancellation as of 31 December 2024 or a change in a group registration will expire as of 31 October 2024.

Stela Bartošová                                          Lenka Kolmanová
bartosova@clarksonhyde.cz                         kolmanova@clarksonhyde.cz