Amendments to 2017 tax laws under way

The Ministry of Finance has prepared amendments to some tax laws that should become effective from 2017. The amendment concerns, among others, the Income Tax Act, the VAT Act and the Tax Code. The amendments are currently under review. We briefly describe some of the proposed changes below:

Income tax

• changes to taxation of assets in joint ownership and to family funds

• changes to computation of terms for the exemption of transfers of securities and shares in companies, e.g. regarding the holding period for testators

• the impossibility of applying tax exemptions from income received from the sale of securities up to CZK 100,000 regarding securities included in commercial property

• taxation of income from dependent activity of a minor extent by way of a withholding tax

• an additional increase in tax benefits for supported children

• restricting the possibility of not taxing revenues related to non-tax deductible expenses only to those revenues that are re-charged non-tax deductible expenses

• the periods for tax depreciation of intangible assets determined by law will be minimum periods

• the possibility of depreciating technical improvements made by a tenant or other users of the property

Value added tax

• termination of the specific adjustment for applying VAT by companies (formerly associations)

• introduction of the category "unreliable entity"

• adjustment of taxable supply regarding recurring supplies

• adjustment of group registration if a member changes via a spin off

• commercial property should also be property used on the basis of financial leasing

• a guarantee by the receiver of a supply in the case of payments made by a virtual currency

Tax Code

• adjustments of interest from a tax deduction

• extension of the notification duty of the tax administrators towards other governmental bodies

• extension of the possibility to pay taxes, customs, and fees by credit cards or other payment methods