Changes in Czech Tax Legislation for 2014 Approved by the Chamber of Deputies (Tax & Fiscal Alert)
Statutory Measures of the Senate amending tax legislation in connection with the re-codification of private law was approved on 27 November 2013 at the first meeting of the newly elected Chamber of Deputies and therefore enter in force effective from 1 January 2014.
The statutory measures in question are No. 340/2013 Coll., on Tax on Acquisition of Immovable Property and No. 344/2013 Coll., on Change of Tax Legislation in Connection with Re-codification of Private Law and on Amending Certain Laws.
Apart from many changes of terminology, also substantive changes take place. Please find a brief summary below.
Statutory Measure of the Senate No. 340/2013 Coll., on Tax on Acquisition of Immovable Property
Tax on Acquisition of Immovable Property replaces Real Estate Transfer Tax effective from 1 January 2014
In case of purchase and exchange, the transferor remains the primary taxpayer, although it is possible that the acquirer becomes the taxpayer based on a contractual agreement
Tax rate remains at 4 %
The rules for assessment of the tax base change
The most titles for tax exemption remain the same, however, the tax exemption of transfer of immovable property in the capital of a corporation is canceled
Statutory Measure of the Senate No. 344/2013 Coll., on Change of Tax Legislation in Connection with Re-codification of Private Law and Amending Certain Laws
Law on Inheritance Tax, Gift Tax and Real Estate Transfer Tax is canceled, gratuitous income is newly subject to income tax
Inherited income will be fully exempt for both natural and legal persons
Exemption from Gift Tax will be applied according to the measure (the scope is similar as in the former legislation but not the same)
Taxation of investment funds remains the same (tax rate 5 %)
Change of taxation of income on sale of securities and investments for individuals takes place
Rules for creation of tax-deductible adjustments to receivables change
If you would like more information or would like to assess the impacts of the new legislation on your company, please do not hesitate to contact us.