CORONAVIRUS: Legal implications for businesses in the Czech Republic

The Czech Ministry of Finance has expanded the scope of parties which are subject to the tax relief of 14 October 2020 that relates to the ban on certain operations due to the current epidemiological situation and the growing spread of coronavirus. We previously outlined these measures in greater detail HERE. Who does the tax relief benefit?

In connection with the ban on certain activities due to the current epidemiological situation and the growing spread of coronavirus, the Ministry of Finance has issued several measures in the area of ​​taxation, which it describes as a large liberation tax package. In fact, the scope of these mitigation measures is very small, both in terms of the tax obligations it is intended to relieve and the range of persons concerned.

On 25 September 2020, Act No. 386/2020 Coll was published in the Collection of Laws, which definitively abolished the tax on the acquisition of real estate. It also includes several changes in the Income Tax Act. The topic has been heavily publicized since the beginning, and political negotiations took place during the legislative process, and the law thus underwent a number of changes compared to the original government proposal. Therefore, we briefly summarize the final form of the adopted fundamental measures.

Tax returns for personal and corporate income tax can be filed without a penalty until 18 August 2020. Likewise, the income tax calculated under such returns will be payable until 18 August 2020. However, this option does not apply to entities which report to the Specialized Tax Authority. Natural persons can file a notification of exempt income in excess of CZK 5 million until 18 August 2020. The deadline for filing employment income tax statements was prolonged to 31 May 2020.

The Czech Finance Minister’s decision published in Financial Bulletin 9/2020 provides for postponing the filing of real estate acquisition tax returns (which were otherwise due to be filed on 31 March 2020 or later) and paying the related real estate acquisition tax until 31 December 2020. The reason is that the tax is expected to be abolished retroactively.

Tax returns for personal and corporate income tax can be filed without a penalty until 18 August 2020. Likewise, the income tax calculated under such returns will be payable until 18 August 2020. However, this option does not apply to entities which report to the Specialized Tax Authority. Natural persons can file a notification of exempt income in excess of CZK 5 million until 18 August 2020. The deadline for filing employment income tax statements was prolonged to 31 May 2020.

At its meeting on April 30, 2020, the government approved the abolition of the 4% real estate acquisition tax and related changes in the Income Tax Act. The content of the proposal of the Ministry of Finance is described below. However, there are likely to be some adjustments to this wording as a result of the coalition agreement. According to the media, the change should concern the maintenance of the tax deduction of interest on real estate acquired until the end of 2021. The time test for the exemption of income from the sale of real estate should be extended to 10 years (compared to the originally proposed 15 years).

At its meeting on April 30, 2020, the government approved a proposal by the Ministry of Finance to abolish the 4% tax on the acquisition of real estate. Compared to the original wording, certain adjustments have been made in order to reach a coalition agreement.

The Ministry of Finance proposes the abolition of a 4% real estate acquisition tax. The proposal will be discussed on Friday 17 April by the Coalition Council of the Government and the National Economic Council of the Government (NECG).

The government has approved additional tax measures designed by the Ministry of Finance to help taxpayers overcome the current situation caused by the spread of the coronavirus. The new tax measures were officially published on 31 March 2020 in the Financial Newsletter. What do they relate to?

VAT payers, who have monthly obligations, may no longer be oriented in the flood of newly adopted tax measures to help taxpayers to overcome the current situation caused by the spread of the coronavirus. For this reason, we provide a brief overview of the tax measures specifically related to VAT and add some important remarks that should be kept in mind.

In addition to the already approved liberalization package, which we have already reported in detail in recent days, the Ministry of Finance has prepared further measures to help taxpayers bridge the emergency caused by the current situation caused by the spread of coronavirus. What is the content of the second liberalization package?

On our blog, we have already reported on the mitigating tax measures approved by the government in relation to the current situation caused by the spread of coronavirus. The Ministry of Finance has now prepared further measures, which also relate to obligations to pay advances for income tax. So what are the options and obligations in the area of advance payments now? What if the taxpayer expects a tax overpayment? The comments below concern mainly taxpayers who are subject to the end of the deadline for filing income tax returns on April 1, 2020.

In connection with the coronavirus emergency, the Czech government has approved a liberation tax package aimed at mitigating the consequences of the emergency. What does it contain?