News in Brief, December 2024

DOMESTIC NEWS

• The chamber of deputies has approved the government's amendment to the Employment Act and other regulations (including the amendment to the Income Tax Act). The amendment abolishes the notified agreement scheme and introduces a special limit for the exemption of health-related benefits. The chamber of deputies has also approved an amendment to the Excise Duty Act. We have previously reported on the approval of an amendment to the Value Added Tax Act. The senate is expected to discuss these regulations at its December session.
   
• Awaiting approval in the chamber of deputies are, among other things, amendments that extend the increased tax support for donations, modify the taxation of employee stock option plans, introduce changes to retirement savings products, and modify top-up taxes.
   
• The General Financial Directorate has launched a new tool to improve the administration of tax and its communication with taxpayers. By sending out a ‘nudge letter’, the GFD seeks to increase voluntary tax compliance and a more efficient tax collection.
   
• The Ministry of Finance has published an updated Overview of Valid Treaties as of 1 December 2024.
   
• In December, three issues of the Financial Bulletin of the Ministry of Finance of the Czech Republic were published with the following content:
  • Communication on Double Taxation Treaties in relation to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, specifically those concluded between the Czech Republic and the following countries:
    • Mongolia (income and wealth taxes)
    • Barbados (income taxes)
    • Bosnia and Herzegovina (income and wealth taxes)
    • the Republic of Azerbaijan (income and wealth taxes)
    • the Kingdom of Bahrain (income taxes).
       
  • GFD Instruction No. GFD-D-64 on the location of the file or its relevant part at the tax authorities and their territorial offices.
     
• The government has approved an amendment to criminal legislation. The bill modernises criminal law, following the EU trends and at the same time responding to some new social phenomena. Find out more on the Ministry of Justice’s website.
   
• The chamber of deputies has approved the government's bill on (work) integration social enterprises. Thanks to the legislation, it will be possible to better integrate those who are in some way disadvantaged in the labour market. The bill is expected to enter into force on 1 January 2025. Some sub-provisions will not take effect until 12 or 24 months later. More detailed information can be found here.
   
• Two directives have been published in the Official Journal of the EU, which will make it much easier for people with disabilities to travel within EU member states. An EU Disability Card and an EU Disability Parking Card for people with disabilities will become a reality. The full system should be operational in the member states by 2028. For more information, click here.
   
• The General Financial Directorate and Charles University’s Faculty of Social Sciences have concluded a memorandum on professional cooperation on corporate income tax analysis.
   

FOREIGN NEWS

• The European Commission has published an updated implementing regulation setting out a single template and electronic formats for reporting under the Public Country-by-Country Reporting Directive (the public CbCR). The changes are minimal compared to the original proposal and include, e.g., the possibility to disclose additional information, moving some optional data to a separate table and clarifying the requirements for the content of the section on subsidiaries. The updated proposal still needs to be formally approved and will enter into force upon publication in the Official Journal of the EU. Details on country-by-country reporting can be found here.
   
• The European Parliament has issued a favourable opinion on the updated version of the FASTER Directive (faster and safer withholding tax relief procedures). The directive is now awaiting formal adoption by the Council of the EU. Member states will be required to transpose the rules into their legislation by 31 December 2028, with the directive expected to take effect from 1 January 2030.
   
• Portugal has passed a law transposing the EU Minimum Tax Directive. The law also introduces a domestic top-up tax. Each constituent entity in Portugal is required to file a notification with the Portuguese tax authorities within twelve months of the end of the first accounting period.
   
• The Czech Republic, Germany, and Hungary have joined the multilateral agreement on the exchange of information on digital platforms. The agreement now covers a total of 29 jurisdictions.
   
• The European Commission has published explanatory notes on the changes to VAT in the EU concerning the special scheme for small businesses (Council Directive (EU) 2020/285 and Commission Implementing Regulation (EU) 2021/200). In the Czech Republic, these changes are included in the amendment to the VAT Act to be discussed by the Czech Senate at its December session.
   
• The KPMG EU Tax Center regularly summarises changes in direct taxes in the EU and internationally that may affect your business. You can read up on important case law and new legislation at OECD, EU, and individual member state levels. The complete latest edition of 20 November 2024 can be found here.