The end of the year 2016 was traditionally accompanied by the expectation of approval of Income Tax Law amendments. It is certain now that the changes proposed by the amendment for 2017 (parliamentary press n° 873) will not be effective from January 1, 2017. The amendment passed on January 13, 2017 in Chamber of Deputies the third reading only. Furthermore, the proposal must be approved by the Senate and signed by the President, nevertheless we can expect the effectiveness from April 1, 2017. However, for many changes the effectiveness will be deferred until 2018.
Regardless of amendment for 2017, some changes acquired efficiency since January 1, 2017. Below, we mention the major changes which should be taken into consideration in 2017:
Changes effective from January 1, 2017 (approved by the amendment 2016 or unbound to the law amendment)
- Increase of tax deductible items for life and pension insurance to CZK 24,000 / year (CZK 12,000 / year until 2016).
- Increase of the limit for exemption of pension and life insurance contributions paid by the employers to CZK 50,000 / year.
- Simplified tax return form for taxpayers with the only income from employment.
- One-off tax relief of CZK 11,000 in connection with Electronic Record of Sales (EET).
- Increase of the tax relief for nursery school fees to CZK 11,000.
Changes with proposed effectiveness from April 1, 2017
- Increase of tax relief for the second child (to CZK 19,404 / year) and the third and further child (to CZK 24,204 / year).
- Exclusion of capital and rental income from the income calculated for purposes of tax bonus’ entitlement.
- In the case of the disposal of use to another person, the technical improvement can be newly depreciated by an economic user (e.g. subtenant).
Changes with probably effectiveness from January 1, 2018
- Possibility to sign the taxpayer´s (employee’s) statement at the employer electronically.
- Application of the withholding tax to the income from employment not exceeding CZK 2,500 / per month.
- Restriction of lump-sum expenses for entrepreneur – maximum amount of lump-sum expenses will be calculated from income CZK 1 million.
- Restored possibility of applying child tax relief and wife/husband tax relief for entrepreneurs.