Amendment to the 2017 tax laws debated in Parliament

As we informed you in spring, an extensive amendment to certain tax laws effective from 2017 is being prepared, namely changes to income tax, value added tax and the Tax Code are expected. The amendment is currently being discussed in the Chamber of Deputies of Parliament, and it is expected that it will be approved at the end of this year.

The amendment contains many changes of a technical legislative or specifying nature. However, there are also some material changes. Regarding income tax, for example, it introduces the possibility to depreciate the technical appreciation of tangible property by the payer who has been allowed to use the property (for example, a lessee), taxation of minor income (less than CZK 2,500) from dependent activity by the employer via a withholding tax, an additional increase in tax benefits for children, depreciation of intangible assets for a period longer than stipulated by law, or adjustments in the taxation of income paid from family funds or trust funds.

Regarding VAT, the specific treatment for associations not having a legal personality (companies) will be revoked, property leased in the form of financial leasing will be considered a company's asset, deficits in cash flow will not be claimed as deductions under law, and the concept of an unreliable person will be introduced.

We will inform you in detail of the changes to the 2017 taxation in our next KempHoogstad Tax News.