Amendments discussed in Chamber of Deputies

Amendment to Act on Administration of Taxes and Fees and Income Tax Act - flat tax-deductible cost on transport

On 10 June 2009 the Chamber of Deputies approved an amendment to the Act on Administration of Taxes and Fees (Parliamentary publication no. 387/0), to which an amendment of the Income Tax Act was additionally appended. The amendment of the Act on Administration of Taxes and Fees imposes the duty on a tax authority to state reasons for their decisions and simultaneously introduces deferment for payment of additionally-assessed tax should an appeal be raised. Concurrently the provision of section 47 of the Act on Administration of Taxes and Fees was amended pursuant to which deadlines were set for assessment of tax. The newly amended change responds to the most recent case law of the Constitutional Court and sets forth the assessment of tax, preparation of an additional tax assessment or recognition of a claim to tax deduction shall not be possible after expiration of three years following the end of the tax year pursuant to which the tax liability arose (currently connected with submission of the tax return). The proposed date of effect was changed at the last minute during the third reading of the amendment. The changes to the Act on Administration of Taxes and Fees shall not take effect until 1 January 2010.

Pursuant to the amendment to the Income Tax Act, a flat tax-deductible transport cost in the amount of CZK 5000 per month can be applied to a road vehicle used for business purposes. If the vehicle is partly used for purposes other than achieving, securing and maintaining taxable income, only 80% of CZK 5000 per month can be applied as a tax-deductible transport cost. This flat tax-deductible cost can be applied starting from 2009.

This draft amendment to the Act on Administration of Taxes and Fees and Income Tax Act shall now be submitted for approval to the Senate and then it will have to be signed by the President.

Amendment to Income Tax Act – flat tax-deductible costs for natural person-entrepreneur

On 19 June 2009 the Chamber of Deputies passed an amendment to the Income Tax Act pursuant to which the flat rates of tax-deductible costs for natural person-entrepreneurs were increased. The former flat rate of 60% for small trades has been newly increased to 80%. For revenue arising from other business activities besides small trades, the former flat-rates of 40% and 50% have been newly increased to the single flat-rate of 60%.  This amendment to the Income Tax Act was attached to the draft Compulsory Labelling of Alcohol Act (Parliamentary publication no. 515). The Chamber of Deputies approved the draft Act so that it could already be used for 2009. This change must be approved by Senate and then be signed by the President.

New Tax Regulations

On 17 June 2009 the Chamber of Deputies approved a new Tax Regulations in its third reading. The originally proposed date of effect was changed during discussions from 1 January 2010 to 1 January 2011. The new Tax Regulations is to be discussed in Senate and should replace the many times amended Tax Administration Act.