News in brief, November 2021
Last month’s tax and legal news in a few sentences.
1 November 2021 In brief
DOMESTIC NEWS IN BRIEF
- The Minister of Finance has decided on an extraordinary waiver of VAT on supplies of electricity and gas for November and December this year. At the same time, the government approved a draft amendment to the VAT Act exempting electricity and gas supplies from a 21% VAT for the whole of 2022, with effect from 1 January 2022.
- Decree No. 375/2021 Coll., amending Decree No. 589/2020 Coll., changing the rate of 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, has been published in the Collection of Laws. The Ministry of Labour and Social Affairs has had to respond to the rising prices of fuel and adjusted the price of petrol. With effect from 19 October 2021, the price for one litre of 95 octane petrol will increase from CZK 27.80 to CZK 33.80. Other prices and depreciation rates remain unchanged. The decree also sets an average price of CZK 5 per 1 kWh of electricity. In view of the rising electricity prices, further amendments to the decree can be expected.
- Notice No. 380/2021 of the Ministry of Labour and Social Affairs prescribing the reduction limits for the adjustment of the daily assessment base for sickness insurance purposes applicable in 2022 has been published in the Collection of Laws.
- The CNB has raised interest rates from 1 October 2021. The two-week repo rate of 0.25% was applied for default interest for the first half of 2021 (as well as for the second half of 2020). The repo rate effective on 1 July 2021 of 0.50% shall be used for default interest in the second half of 2021. The newly announced repo rate of 1.50% shall apply to penalties in the tax administration only from 1 January 2022, unless it is changed before then.
- The GFD draws the attention of taxpayers and payroll software developers to the new prescribed forms for tax on income from employment and withholding tax for the 2021 and 2022 taxable periods.
- The financial administration informs personal income taxpayers who use the lump-sum regime that the monthly lump-sum advance payment amount will change for the 2022 taxable period due to the increase in advances for health and social security insurance. The total amount of the lump-sum advance payment per calendar month will now amount to CZK 5,994.
- Financial Bulletin No. 32/2021 offers a list of countries on the EU list of non-cooperative jurisdictions for tax purposes approved by the Council of the European Union.
FOREIGN NEWS IN BRIEF
- The lower house of the Polish parliament passed the Polish Deal tax package. If approved by the Polish senate, most measures should become effective from 1 January 2022. The bill includes significant corporate income tax changes, like a new Polish holding company regime, a minimum corporate income tax, innovation reliefs, and a reform of the transfer pricing rules. The bill also includes amendments to the withholding tax collection system. For more details, please see an overview of all proposed measures here.
- The European Parliament Subcommittee on Tax Matters (FISC) urges the European Commission to assess the possibility of introducing a pan-European corporate income tax regime. The system would be optional, and the revenues would be allocated to member states based on an agreed formula. The subcommittee also asks the Commission to propose procedures to ensure a more consistent determination of tax residency within the EU and reflect these procedures in a directive on tax dispute resolution mechanisms in the EU in 2023.