Recently, changes in tax depreciation have been passed in the Senate and head for president’s signature. The aim of the changes is to encourage businesses to make investments.
The change introduces special tax depreciation for assets categorized in class 1 and class 2 (according to the Czech Income Tax Act) purchased from 1 January 2020 to 31 December 2021. The new depreciation period of assets in class 1 should be 1 year instead of 3 years; as for class 2, it should decrease from the current 5 years to 2 years.
Secondly, the threshold for classification of individual tangible assets in the category of tangible assets should increase from CZK 40K to CZK 80K.
In addition, another goal is to abolish tax depreciation of intangible assets, which should now be depreciated the same way as in accounting. The new rule should apply to intangible assets purchased after this amendment has come into effect.
From our point of view, the changes are very favourable as they reflect the recent situation, with the aim to support purchases of fixed assets used for business. Our company fully supports the draft amendments.
Should you have any questions regarding the issues above, please do not hesitate to contact Jan Lamač, Partner, at jan.lamac@tpa-group.cz
