Financial administration’s view of 2024

Increased tax and customs collection

Total taxes and customs collected in 2024 amounted to CZK 1,423.7 billion, which is 2.4% more than the previous year. Traditionally, VAT accounts for the largest share of state revenue (CZK 584.1 billion) although its growth was slowed by the unification of reduced rates to 12% and slower growth in household spending. Personal income tax collection rose significantly to CZK 263.1 billion (+13.9%) due to faster wage and salary growth. The real estate tax collection also increased sharply to CZK 16.5 billion (+81.8%), mainly due to an increase in the basic rates and a greater power of municipalities to adjust them. On the other hand, corporate income tax collection fell by 6.7% year-on-year.

Inspection procedures and their results

In 2024, the financial administration continued its intensive inspection activities and in addition to its standard procedures used the tax echo mechanism for targeted communication with taxpayers. A total of 44,679 inspections were carried out, a 7.4% decrease year-on-year. These resulted in an increase in tax liabilities by CZK 4.72 billion (a year-on-year decrease of 10.8%) and a reduction of claimed tax losses by CZK 60.3 million (a year-on-year decrease of 33.3%).

Of all inspection procedures completed, the financial administration carried out 9,757 tax inspections (down 6.1% year-on-year) that resulted in additionally assessed taxes of CZK 5.98 billion and tax losses decreased by CZK 2.98 billion. These inspections focused mainly on VAT fraud, correct setting of transfer prices for corporate income tax, and unjustified tax credits and non-taxable items for personal income tax. There were 6,937 procedures to remove doubt (year-on-year decrease of 16.4%), resulting in additionally assessed tax of CZK 443.7 million and tax losses adjusted by CZK 62.2 million. The procedures to remove doubt were often carried out to examine the rights to deduct VAT and inspect formal errors in submitted tax returns.

The Ministry of Finance also states that in 1,024 cases the taxable entities were awarded interest paid by the tax administrator, amounting to CZK 148.6 million, which represents a year-on-year increase of 172.7%. However, the published data relate only to VAT, making us question why similar statistics are not provided about other taxes.

 
And what will this year bring?

2025 has been marked by continued modernisation and efficiency enhancement in the tax and customs administration. The financial administration is further developing the tax echo project with an expected benefit of CZK 80 million for the state budget, targeting taxpayers who incorrectly claimed tax credits for spouses for 2022. Another important project is the introduction of single monthly employer reporting (JHMZ), which aims to simplify administration through, e.g., pre-filled tax returns.

This year, the financial administration aims to continue towards digitisation and the data-targeting of inspections, with a focus on formal supervision and preventive communication with taxpayers.