News in Brief, April 2023

DOMESTIC NEWS

• Amendment to Act No. 66/2022 Coll., Lex Ukraine, implemented by Act No. 75/2023 Coll., imposes a new obligation on employers from 1 April 2023 to report to the relevant Social Security Administration the recruitment of an employee who is a foreigner with temporary protection status and simultaneously in small-scale employment or working under an agreement to perform work. Thus, uninsured persons shall also be registered. At the same time, employers will also have to register themselves.
• On 22 March 2023, the government approved a draft amendment to the Investment Incentives Act, including the relevant decree, which amends the existing rules for the consideration of applications for investment incentives and the conditions for their approval. The decision-making power will be returned to the Ministry of Industry and Trade and to other ministries concerned; the government will continue to approve only strategic investments.
• The following regulations were published in the Collection of Laws:
  • Communication 75/2023 of the Ministry of Labour and Social Affairs, on the average gross annual wage in the Czech Republic for 2022 for the purposes of issuing blue cards pursuant to Act No. 326/1999 Coll., on the residence of foreign nationals in the territory of the Czech Republic
  • Act No. 75/2023, amending Act No. 66/2022 on employment and social security measures in connection with the armed conflict in Ukraine caused by the invasion of the Russian Federation troops
  • Regulation 85/2023, amending Regulation No. 467/2022 Coll., amending the basic compensation for the use of road motor vehicles and meal allowances, and determining the average price of fuel for the purpose of providing travel allowances for 2023
• Government decree No. 89/2023 amending government decree No. 221/2019 Coll., on the implementation of certain provisions of the Investment Incentives Act, as amended.
• As of 1 January 2023, the range of persons for whom a data box had been established by law was significantly expanded. This has a major impact on the delivery of communications to this group of persons by public authorities. The financial administration has issued an explanatory leaflet on this.
• In March, the MoF updated the overview of effective double taxation treaties. In March, the MoF published three Financial Bulletins which contain:
  • Financial Bulletin 4/2023
    • a list of contracting states applying the common standard for notification and decisive days published pursuant to Act No. 164/2013 Coll., on International Cooperation in Tax Administration.
  • Financial Bulletin 5/2023
    • an overview of the types of taxes and their parts for which personal tax accounts are kept by the Czech Customs Administration. A list of matrix parts of bank accounts of customs offices.
  • Financial Bulletin 6/2023
    • communication on a treaty between the Czech and Romanian governments on the avoidance of double taxation and the prevention of tax evasion in the field of income and property taxes in relation to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting.
• The Ministry of Labour and Social Affairs has introduced its new Family Policy Strategy 2023-2030, aimed at creating favourable and stable conditions for families, raising children, and caring for loved ones. Around 40 different stakeholders ranging from ministries to non-profit professional organisations and the academic sphere were involved in drafting the strategy. More information can be found HERE.
• The Ministry of Industry and Trade has issued Q&A on data boxes and the capping of electricity and gas prices.
• The GFD has summarised information on the obligation of natural persons to report exempt income (deadlines, examples, etc.). A natural person’s incomes exceeding CZK 5 million exempt from tax must be reported.

FOREIGN NEWS

• The European Parliament's sub-committee on economic and monetary affairs (ECON) has discussed amendments to the forthcoming directive on the debt-equity bias reduction allowance (DEBRA). The European Parliament is due to vote on the amendments on 17 April 2023. However, its position on the legislation is advisory only. The adoption of the directive is a matter for the EU Council, which has suspended its deliberations for the time being.
• Following consultations with member states, the European Commission has adopted a new Temporary Crisis and Transition Framework for state aid. In addition to the rules on state aid in the context of high energy prices, it significantly relaxes the conditions for state aid (including tax benefits) for new climate investments, in response to a similar regulation in the United States.