Communication by the Ministry of Finance11/09/09 / cata_tax-news
The Ministry of Finance (MF) issued Instruction D-324 interpreting the term “residential needs” so that interest paid on mortgages can be claimed as tax-deductible by natural persons.
Pursuant to the interpretation of the MF, the interest paid on the refinancing of a mortgage can be newly deemed as tax relief for residential needs. The Instruction was published under No. 39/62 250/2009-392 and is available at the website of the Czech Tax Administration of MF (http://cds.mfcr.cz). The MF’s latest interpretation completely contradicts its former interpretation published in the MF communication of 15 June 2009. We believe that people who proceeded to prepare their tax returns according to the previous communication of the MF can submit additional tax returns and now claim interest paid on mortgage payments as tax-deductible and thereby reduce their tax duty.