The 2021 tax package, including taxation on securities trading

On 20 November 2020, the Chamber of Deputies approved the 2021 tax package. There have been changes made to the package during the discussion about the governmental bill. Below, we mention the most important points from the approved wording of the bill as it left the Chamber of Deputies. It is widely expected that, because of many uncertainties, the Senate will make changes to the below-mentioned points. The tax package will be discused independently on 10 or 11 December 2020. We will keep you informed about the next developments and the final form of how this could impact your business in 2021.

The tax package contains, among other things, the following measures:

Change to the tax depreciation of assets (amendment)

• Introducing the possibility of extraordinary depreciation of tangible assets in the first and second depreciation category acquired between 1 January 2020 and 31 December 2021.
• Increasing the limit for classification as tangible asset and its technical appreciation for the purpose of income tax from CZK 40,000 to CZK 80,000.
• Abolition of the tax depreciation of intangible assets.

Change relating to the basic tax relief to income tax (amendment)

• In the future, the basic relief would correspond to average gross monthly nominal salary adjusted for full-time employment in the calendar year before being last published by the Czech Statistical Office (the relief should be CZK 34,125 in 2021) instead of the currently used fixed amount of CZK 24,840.

Cancelling the limit for tax bonus - tax advantage for a supported child (amendment)

Eliminating super-gross salary and change to the income tax rate (amendment)

• Eliminating super-gross salary
• Introducing progressive taxation with tax rates of 15 per cent and 23 per cent. The 23% rate would be applied to income exceeding 48 times the average salary (CZK 1,672,080 in 2020). In addition, the tax rate for the tax base has been set at 15 per cent.

Change relating to exemption of paid securities trading (amendment)

• The amendment by MP Mikuláš Ferjenčík introduces a limit of CZK 20 million for the exemption of income from paid securities trading and a share respective to the investment unit after closing an investment fund (if the time period between the acquisition and the paid trading is over three years). Income over CZK 20 million in one tax period will be subject to income tax.

Meal voucher allowance

• Employers can provide employees not only with non-monetary forms of supply (i.e. paper meal vouchers) but also a contribution in monetary form.