Significant tax changes

1. 7. 2020

On 1. 7. 2020 Act No. 299/2020 Coll. took effect, by which certain tax regulations have been changed in connection with the incidence of SARS CoV-2, as did Act No. 159/2020 Coll. on the compensation bonus in connection with crisis measures. By these Acts, the legislator wishes to alleviate the impact of the COVID-19 pandemic on the economy of the Czech Republic, which is why changes have been made in the following tax regulations:

  • Act No. 338/1992 Coll., on real estate tax as amended:

A municipality has new possibilities to exempt real estate from real estate tax. This concerns real estates situated on the territory of the municipality; exemption can be full or partial based on a binding ordinance. In the past this possibility was only in the event of a natural disaster; newly it is also for special events. The binding ordinance can concern:

a) all real estates, plots of land, taxable buildings and units throughout the territory of the municipality;

b) all real estate, plots of land, taxable buildings and units on the cadastral territory affected by a special event; or

c) individual real estates affected by a special event.

  • Act No. 586/1992 Coll., on income tax as amended:

The possibility to apply tax losses carry back has been established in the Act. We devoted more detailed attention to this issue in the special newsletters nos. 6 and 16.

  • Act No. 16/1993 Coll., on road tax as amended:

As regards automobiles with a permitted weight over 3.5 tons, annual tax rates have been reduced in order for Czech road tax rates for these vehicles not to be markedly higher in comparison to other states.

  • Act No. 353/2003 Coll., on consumer taxes as amended:

In the context of support for agricultural enterprise, there is a shortening of the deadline for returning a returnable overpayment on consumer tax from so-called green fuel, from 60 days to 15 (if the payment assessment is declared) or 40 days (if the payment assessment is not declared).

  • Act No. 235/2004 Coll., on value added tax as amended:

In order to support certain segments of the economy, VAT on certain services has been reduced from 15 % to 10 %.  The change of rates concerns accommodation services, personal transport by ski-tows, sports events, use of sports facilities and use of Turkish baths, saunas, steaming baths and salt caves.

  • Act No. 164/2013 Coll., on international cooperation when administering tax and on the change of further connected Acts, as amended:

The jurisdiction of the government to react operationally to EU regulations has been established insofar as it can, by regulation, extend the deadline for fulfilling obligations connected with automatic exchange of information during international cooperation on tax administration.

  • Act No. 159/2020 Coll., on the compensation bonus in connection with crisis measures in connection with the incidence of the SARS CoV-2 coronavirus, as amended:

On the basis of this Act, the Ministry of Finance will provide municipalities with a non-returnable contribution, where the amount of the contribution will equal the product of the amount of CZK 1,200 and the number of municipality inhabitants pursuant to the balance of CR inhabitants processed by the Czech Statistical Office as at 1. 1. 2020. The contribution will not be purposefully determined.

Should you have further questions as to the above-mentioned tax regulation changes, we are at your disposal.

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