News in brief, January 2022

DOMESTIC NEWS IN BRIEF

• In its policy statement, the government has presented the following tax-related plans:  
  • Advocate within the European Union for the implementation of a global agreement on two-pillar taxation at the OECD level, ensuring that multinational companies pay taxes where they actually do business and generate profits.
  • Cancel non-systemic tax exemptions that are not social in their nature.
  • To the extent possible in public budgets, aim to reduce social insurance on the employers' side by two percentage points.
  • Abolish the obligation to electronically report sales and parametrically modify the VAT ledger statement to reduce disproportionately high penalties. 
  • Introduce a single collection point currently running on a pilot basis for about 70,000 entrepreneurs applying the lump-sum tax regime.
  • Accelerate the digitalisation of the state administration by linking incompatible portals of individual offices.
  • Introduce an annual adjustment to the basic tax relief per taxpayer and a tax holiday with a cap on the income for families drawing parental allowance or having three or more children. 
  • Extend municipalities’ options when setting the real estate tax rate coefficient.
  • Create a uniform public registry of state budget subsidies and set rules for transparent documentation of the beneficial owners of companies drawing on state subsidies.
• GFD’s Instruction No. D-54 – Determination of fixed rates for the 2021 taxable period under Section 38 of Act No. 586/1992 Coll., on Income Tax, as amended until 31 December 2021 was published in the January issue of the Financial Bulletin.
• The Confederation of Industry and Transport of the Czech Republic has published an updated version of the popular "Tax Issues of Electromobility" handbook.
• The Czech Social Security Administration’s ePortal offers another online service for employers, as they can now access data on any open insurance relationships of their employees, search for employees of all or one payroll office or access data on one specific employee. Details can be found here.
• The Ministry of Industry and Trade's website summarises what laws will change with the new year here. 
• Changes in labour and social affairs from 2022 can be found here.
• Starting from the 2021 taxable period, the conditions for claiming the exemption of proceeds from the sale of a family house or a unit conditional upon the use of the acquired funds for one's own housing needs have been tightened. The financial administration has issued further information on this topic.
•  The Act on the Extraordinary Allowance to an Employee in the Event of an Ordered Quarantine was promulgated in the Collection of Laws under No. 518/2021; the Act on the Compensation Bonus for 2022 was promulgated under No. 519/2021; and the Act on Further Adjustments to the Provision of Carer’s Allowance in connection with Emergency Measures related to the COVID-19 Pandemic was promulgated under No. 520/2021.
• Due to the ongoing update of the financial administration's database of prescribed forms, it is not yet possible to process and send the personal income tax return form for the 2021 taxable period via the Electronic Filing Application (EPO).
   

FOREIGN NEWS IN BRIEF

• The European Commission has issued a proposal for a directive aimed at fighting the use of shell entities and arrangements for tax purposes (designated as ATAD 3). Companies failing to meet the substance indicators as set out under the directive will be denied certain tax benefits arising from double tax treaties and EU directives. The new directive should become effective from 2024.