Tax law amendments within Governmental savings were approved by the Chamber of Deputies
The Chamber of Deputies has approved in the third reading on November 7, 2012 the government’s tax package:, which contains many tax changes. The changes should apply from January 1, 2013. Below mentioned changes will be further discussed in the Senate, which can either approve them or send them back to the Chamber of Deputies.
The proposed changes include especially the following:
- Increase of reduced and basic VAT rates by one percentage point to 15 % and 21 %.
- Introduction of „solidarity contribution“ for the employment and self-employment income with the income exceeding 4 times the average salary (approximately CZK 103 000 a month) amounting to 7 %.
- Cancelation of the cap for the payment of insurance premiums for public health insurance.
- Restrictions on using the 30 and 40 percent flat rate expenditure for self-employed persons and rental income only when annual income does not exceed CZK 2 million.
- Abolition of the tax discounts for the husband/wife without their own income and child tax benefits for self-employed persons and persons with rental income applying any flat rate. The limitation applies if the sum of the partial tax bases is higher than 50 % of the total tax base
- Increase of the withholding tax to 35 % of the income from sources on the territory of the Czech Republic of foreign tax residents (interests and royalties). This provision applies to tax residents of countries with which the Czech Republic has not concluded a treaty for avoidance of double taxation.
- Increase of real estate tax from 3 % to 4 %.
Should you have any questions regarding tax changes, please do not hesitate to contact us.