As we informed you last year, taxpayers are obliged to submit a notification of income paid out into a foreign country even when paying out an exempt income or an income which is not taxed in the Czech Republic based on a relevant double taxation treaty.
Nevertheless, effective from 1 January, there are two important changes in this notification:
CZK 300,000 Threshold
The report is submitted only for the months in which the amount towards the same recipient for the same kind of income exceeds the threshold of CZK 300,000. This means an increase in the threshold from CZK 100,000 to CZK 300,000.
New Deadline for Submission by 31 January of the Following Year
Moreover, the notification will be submitted annually by 31 January of the following year in which the income tax would be withheld if the tax were withheld on the given income. The previous filing frequency depended on actual payment (or set-off) of interest liability and/or booking the interest liability.
However, it is still necessary to file separately a particular kind of income (e.g. dividends, interests) for a particular recipient.
The new amendment is effective from 1 January 2021 and therefore applies to the income realized/booked after this date. As for the notification for December 2020, the “old” provision, valid until 31 December 2020, should be applied.
