The lower chamber of the Czech parliament has recently passed a broadly discussed change of income taxation for individuals. After 13 years, the tax basis for income tax shall not be derived form a so called “super brutto” tax basis, i.e. from income increased by employer’s contribution to social security. Through this change, the tax basis is being reduced significantly from 1.34 of gross salary to gross salary. At the same time, the tax rates are being set progressively at 15% and 23%.
This tax decrease is currently under heavy discussion in the Czech Republic, as the reduction of tax revenues for the government budget is being seen as extreme. The legislation procedure is still ongoing as these changes of Corporate Income Tax Act must be passed by the Senate the next. Possibly, we will be observing some further development. We will inform you about this issue in more detail in our next newsletter issue.
