Tax and legal news

The amendment should abolish the obligation to submit to the government each request for granting an investment incentive Assessing the incentives will be done in most cases by the Ministry of Industry and Trade, with the help of other ministries.

Global minimum tax will be applied from the tax period starting on 1 January 2024 and it will concern all companies within a group whose consolidated revenues have exceeded EUR 750 million (CZK 18 billion) in at least two of four of the immediately preceding tax periods.

Since the beginning of the year, changes have been introduced in the taxation of employees and in the area of social security and health insurance. The maximum assessment base for social security contributions has been increased; thus, the limit for taxation at the higher tax rate of 23% has also been raised. A new discount on contributions for vulnerable employees has also been introduced. At the same time, after almost twenty years, the income limit for filing personal income tax returns has been significantly increased.

A new Income Tax Act guideline (D-59) replaced the original D-22 guideline as of January 2023. The new guideline mainly contains clarifications from recent case law and coordination committee decisions. In practice, however, there are no significant changes from the former version of the guideline.

EU Member States have agreed to introduce a minimum effective tax rate, and before Christmas the Directive on ensuring a global minimum level of taxation for multinational enterprise groups and large domestic groups came into force. Member States must implement it by the end of 2023.

The Regional Court in Prague judged the situation of a company that claimed interest on a bank loan for the purchase of a share in a Czech company with which it was subsequently to merge. The loan had been granted by a group of banks to an entire investment group, and the debt was subsequently transferred to the Czech company that had made the purchase of the shareholding.