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Czech: The Income Taxes Act


On 18 August 2017, Act No. 246/2017 Sb., providing for European political parties and European political foundations became effective.

As part of the Act, there is also a change in the Income Taxes Act. Natural persons and legal entities may deduct from their income tax bases (that is, for both personal and corporate income tax) their donations to European political parties and European political foundations. Donations received by European political parties and European politica foundations are exempted from income tax.

Effective 1 September 2017, with the effect for the whole year 2017, a free of charge donation of blood-forming cells is valued at CZK 20.000 per one session, and the value of a free-ofcharge blood donation has increased from CZK 2.000 to CZK 3.000. The amounts can be claimed in tax returns for the year 2017, or in yearly reconciliations of tax on dependent activity (employment) for the year 2017; regardless of whether donations took place before or after 1 September 2017.

Effective 1 January 2018, the tax credit for the first child has increased from CZK 13.404 to CZK 15.204.


Minimum wage effective 1 January 2018

On 21 August 2017, the Government of the Czech Republic passed the amendment of the statutory instrument No. 567/2006 Sb., and effective 1 January 2018 the minimum wage will increase to CZK 12.200 (at present, it is CZK 11.000). The amendment will be published in the Collection of Laws in September. From the amount of minimum wage other payments derive, for instance, the maximum tax credit parents may claim for placing their child in a preschool facility, the limit of income decisive for claiming a tax bonus per a child, payments of health insurance of persons without taxable income etc. From 1 January 2018, the minimum payment of health insurance will increase to CZK 1.647 (at present, it is CZK 1.485).

In connection with the higher minimum wage, the minimum amounts of the guaranteed wage will also increase.


The amendment of the State Social Support Act

On 1 January 2018, the amendment of the State Social Support Act will become effective (Act No. 200/2017 Sb). The amendment of law will introduce changes in drawing and in the amount of parental benefits, and child benefits will increase.



On 1 July 2017 significant changes in delict legislation became effective: Act No. 250/2016 Sb., providing for liability  or delicts and delict proceedings, and Act No. 251/2016 Sb., providing for certain delicts. In connection with the legislative changes, a wide range of laws was amended, including accounting and tax laws.

The Act providing for Restrictions on Cash Payments:

Under the new rules, legal entities and entrepreneurs may be sanctioned as much as CZK 5.000.000 for a delict. Under the old rules, the maximum sanction was CZK 500.000.

The Act providing for Registration of Sales:

New delict provisions have been introduced under which the maximum sanction is CZK 500.000.

The Act providing for Social Security Premiums:

Under the new rules, self-employed persons will commit a delict if they fail to submit their due and corrective reports of income and expenditures, or if they fail to document the fact that their tax reports are processed by tax advisers. A delict may be penalized up to CZK 50.000.


Meal vouchers

In connection with the amendment of the Act providing for Restrictions on Cash Payments, the Chamber of Deputies of the Czech Republic (in its 3rd reading) probably passed an amendment of the Income Taxes Act which restricts employees’ tax exemption of meal vouchers. Under the new rules, an employer will have to make a written agreement with the company issuing meal vouchers which will stipulate that meal vouchers may only be used for the purposes of staff canteen.


Registration of Beneficial Owners

Effective 1 January 2018, beneficial owners of legal entities will have to be registered in a public register. The data will not be freely accessible to the public, but a very wide range of persons will be able to access the extracts from the register. On 23 August 2017 the Ministry of Justice tendered the register of beneficial owners with the estimated date on 5 September 2017. The Ministry requires that the register should start to operate on 1 January 2018.


Sickness insurance

Effective 1 January 2018 sickness benefits will be increased in the cases of a long-term sickness.

Effective 1 February 2018 a new type of a sickness benefit will be introduced for fathers of new-born babies. The benefit will be provided for the period of 7 days, not later than 6 weeks after childbirth.

In the second half of 2018, a new benefit is likely to be introduced for persons who take care, on a long-term basis, of their family members in the case of a sudden illness or after an injury. The benefit will be paid for up to 90 days. An employer may refuse to allow the leave of his employee due to serious operating reasons, if the employer notifies the reasons to his employee in writing. In all other cases, employers will have a duty to allow their employees’ absence from work. During the period when an employee takes care of his family member, the employer will not be allowed to give such employee a notice of termination. For the purposes of calculating vacation, the period of taking care for a family member will be treated as a period of work performance.


Written by

Klara Kosinova

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