The amendment to the Income Tax Act introduces the possibility for taxpayers to calculate, under certain conditions, corporate Income Tax in a foreign currency.
The calculation of the income tax in a foreign currency will only apply to corporate income taxpayers which are accounting entities and whose accounting currency is a currency other than the Czech currency (i.e. the euro, the US dollar or the British pound).
The calculation of the tax in a foreign currency will not be applicable to personal income tax, withholding tax or windfall tax. These categories will continue to adhere to the standard tax calculation regime using the Czech currency.
Entities opting for a foreign currency as their accounting currency are obliged to use the same foreign currency for tax calculation purposes. There is no flexibility in this regard.
These proposed changes currently concern solely the computation of income tax in a foreign currency and permit the administration of tax only in the Czech currency.
The current possibility to pay tax assessed in the Czech currency using a foreign currency will remain unchanged.