Changes to taxation of firms

Changes to depreciation of photovoltaic power plants

The conditions for depreciation of photovoltaic power plants have been changed by revoking the provision stating that the depreciation is done evenly for 240 months. Instead, the facilities will be classified as the second or third depreciation group and depreciated in the even or accelerated way in accordance with Annex no. 1 to the Income Tax Act. We recommend checking the transitional provisions that govern namely the dates from which the facilities were used and their division into the technological and construction parts.

Tightening of conditions for mandatory employment quotas for employees with disabilities

It will no longer be possible to draw substitute supplies from affiliated persons. Failure to meet the mandatory 4% quota for these persons will now be settled by a payment ranging from 3.5 to 1 times the actual number of these employees, i.e., a progressively degressive approach is being introduced instead of the previous flat rate of 2.5 times.

Qualified employee shares

Qualified employee shares consist of the transfer, free of charge, of a non-transferable promise to acquire a qualified share to an employee. The law stipulates the timing and method of taxation. The employee is responsible for reporting this income in their tax return. However, the employer has a reporting obligation under the JMHZ.

Research and development deductions

The changes effective from January 1, 2026 mainly concern the method of calculating the research and development deduction and the deadline for claiming it. The biggest change is an increase in the deduction from 100 percent of the costs incurred to 150 percent, up to a limit of CZK 50 million. This limit includes both the expenses of the company in question and the expenses of all taxpayers who are part of the same deduction unit, i.e., the controlling entity and controlled entities.
Another significant change is the extension of the deadline for claiming the deduction from three to five years. It remains essential to keep consistent and transparent records of all costs and time spent on research and development projects, as confirmed by the case law of the Supreme Administrative Court. It is also important to keep supporting documents that will allow the accuracy of the data to be verified retrospectively.

Donations to Ukraine

The validity of increased tax relief on donations to Ukraine is extended up to 30% of the income tax base.