Newly approved and effective laws11/09/09 / cata_tax-news

• Discounts on insurance – Act No. 221/2009 Coll. amending Act No. 589/1992 Coll. on Social Security Insurance Contributions and Act No. 586/1992 Coll. on Income Taxes

An Act allowing a discount on social security insurance contributions was published on 20 July 2009 and became effective on 1 August 2009. Employers employing, or intending to employ, employees whose income is 1.15 times lower than the average wage may apply for the above mentioned discount (for the purposes of Act No. 589/1992 Coll. on Social Security Insurance, the term “average wage” is set forth in Section 5c, Subsection 1 of this Act and differs from the average wage calculated by the Czech Statistical Office). The average wage for the purposes of social security insurance shall amount to CZK 27,100 (rounded up) for the year 2009.

The discount on insurance can be applied between 1 January 2009 and 31 December 2010. The discount on insurance may be applied as both (i) an extraordinary discount on insurance determined for individual calendar months of the year 2009 prior to the Act taking effect (the claim for the extraordinary discount may be applied from the first calendar month in which the Act comes into force, i.e. starting from August 2009 for the prior months of 2009) and (ii) a common discount on tax applied as of the date of effectiveness of the Act, i.e. as of August 2009.

Regarding the adoption of the Act, a phrase specifying in more detail the tax regime for discounts on social security insurance has been added to the end of Section 6, Subsection 13 of the Income Tax Act. When calculating the relevant tax base pursuant to the new legislation, any discounts or other amounts by which the employer reduces the obligatory insurance payment shall not be taken into account. In fact, the amount of discounts on insurance applied shall not affect the determination of the tax base of employment income tax for either (i) the calculation of advances on tax or (ii) the calculation of a yearly tax duty.

• The Payment System Act

The Chamber of Deputies approved the new Payment System Act that implements Directive No. 2007/64/EC on payment services into the Czech legal system. The Act was published in the Collection of Laws under No. 284/2009 Coll. and approved by the Chamber of Deputies through an accelerated reading with an effective date of 1 November 2009. The Act replaces previous legislation on payment systems and newly regulates obligations on transfer payments for non-bank providers of payment system services. The legislation concerning electronic money, payment systems and public conditions for the provision of such activities (as well as regulation of private law relations) is included therein.

• The Amendment to the Act of Administration of Taxes and Fees through the Payment System Act

Together with the Payment System Act, an accompanying Act published in the Collection of Laws under No. 285/2009 Coll., was approved. The Act amends nearly 22 legal regulations. The Act of Administration of Taxes and Fees (part No. 15), in which the due date of tax duties is changed, is one such act. The date of payment shall no longer be the date on which the funds are debited from the debtor’s account as currently practiced, but shall be deemed the date on which the funds are credited to the tax administrator’s account. The above-mentioned regulation is currently valid only for payments of tax duties from accounts held in foreign currency or from accounts held abroad. The date of effectiveness shall be 1 November 2009. The Act on General Health Insurance Contributions (part No. 16) and Act on Social Security Insurance Contributions (part No. 17) have also been amended in a similar manner. The date of effectiveness of the above mentioned Acts is set for 1 January 2010.