News in brief, July 2023

DOMESTIC NEWS

• The following regulations were published in the Collection of Laws:
  • Regulation No. 191/2023 Coll., amending Regulation No. 467/2022 Coll., amending the rate of basic compensation for the use of road motor vehicles and meal allowances, and determining the average price of fuel for the purposes of providing travel expenses for 2023.
  • Communication No. 192/2023 Coll. of the Ministry of Labour and Social Affairs, announcing an amount equal to 50% of the average monthly wage in the national economy for the purposes of the living and subsistence minimum and an amount equal to 50% and 25% of the average monthly wage in the national economy for the purposes of state social support.
  • Act No. 173/2023 Coll., amending Act No. 325/1999 Coll., on asylum and Act No. 326/1999 Coll., on the residence of foreign nationals in the Czech Republic.
  • Act No. 171/2023 Coll., on the protection of whistleblowers, and Act No. 172/2023 Coll., amending certain acts in connection with the adoption of the Act on the Protection of Whistleblowers. 
• The Ministry of Finance published an updated list of effective double taxation treaties.
• The government approved an amendment to laws in connection with the development of the financial market and the provisions of support for old age, with effect from 1 January 2024. The amendment proposes modifications to Pension Pillar III to increase the attractiveness of saving for old age and introduces a new state-supported method of saving for retirement, the ‘long-term investment product’.
• The financial administration draws attention to the postponement of the effectiveness of the amendment to the VAT Act relating to immovable property to 1 January 2024.
• The financial administration also issued information on windfall tax prepayments and on DAC 7:
  • Information for windfall tax prepayment payers
  • XSD structure for creating XML reports on reportable sellers under DAC7.
• The government approved an amendment allowing the establishment of energy associations and the sharing of the produced electricity.
• The Ministry of Industry and Trade published the results of assessing the administrative burden on entrepreneurs for 2022, carried out in cooperation with the relevant ministries and other state administration authorities using the Database of Information Obligations, an online tool. The report informs about the implemented system steps and measures to reduce the burden on entrepreneurs, about digital projects within the ministry’s competence and about working groups dealing with the business environment. An overview of current and upcoming measures can also be found on the www.stopbyrokracii.cz website.
• Within the DigiCompetence project, the Ministry of Labour and Social Affairs has created a new scenario of the self-evaluation tool EVALDO – Home Office to test the level of digital competencies that are needed to perform work from home. More information can be found HERE.
• In June, the government approved an amendment to the law focusing on organisational changes in the Czech Social Security Administration (ČSSZ). Individual district administrations will now be administratively replaced by territorial social security administrations with contact points in each district so that they remain as close to clients as possible. This will provide more flexibility with more agendas and make work easier to organise and move. More information can be found HERE.
• The chamber of deputies approved an amendment to the Labour Code (e.g., changes to agreements for work outside employment, teleworking) including an amendment to the Income Tax Act regarding the tax treatment of compensation for remote work.
• In its second reading, the chamber of deputies discussed an amendment to the Act on Excise Duties, which increases excise duty by CZK 1.50 per litre. The third reading originally scheduled for 29 June 2023 has not yet started.

• At the June ECOFIN meeting, ministers debated the Commission's proposal for a VAT in the Digital Age package, with proposed effect from 2024 (in particular, the issue of reporting standards and e-invoicing). The proposal will be discussed further and the adoption of the regulation with the originally proposed effective date is unlikely.
• The Swedish EU Presidency Report indicates that progress has been made on several issues of the draft UNSHELL directive, such as applicability, substantive criteria, tax implications, tax residence certificates, and reporting deadlines. However, further discussions will be needed to find a compromise solution to some outstanding issues.
• The European Commission has released for consultation a proposal for a directive on a uniform system of application of withholding tax (FASTER). The proposal is intended to introduce faster procedures for applying withholding taxes, in particular on distribution of profits and interest on publicly traded shares and bonds. The main tools are to be the introduction of a single digital tax residence certificate and a central register of financial intermediaries acting between investors and withholding tax payers (issuers of securities). The directive is proposed to take effect on 1 January 2027.
•  The European Commission has launched a consultation on a draft implementing regulation setting out the rules for the application of the Carbon Border Adjustment Mechanism (CBAM) during its transitional phase (1 October 2023 to 31 December 2025). During this period, importers of goods falling within the scope of the CBAM will only be required to comply with reporting obligations, without making any payments. The proposal outlines the methodology to be used during the transitional period to calculate embedded emissions released during the production process of CBAM goods. In the first years, the companies concerned could choose between three reporting methods. From 1 January 2025, the new EU methodology would be the only reporting methodology.