Czech Republic: Proposed direct and indirect tax changes, including public country-by-country reporting

Proposed direct and indirect tax changes

Proposed direct and indirect tax changes

The Act on the Consolidation of Public Budgets, approved by the chamber of deputies in October 2023 and discussed by the senate on 8 November 2023, includes the following proposed direct and indirect tax changes (most proposed to be effective 1 January 2024):

  • Corporate income tax and accounting
    • Corporate income tax rate increase
    • Limitation of tax deductibility for selected costs/expenses
    • Reporting income flowing abroad
    • Functional currency
    • Possibility to tax only realized foreign exchange differences
    • Public country-by-country (CbC) reports and sustainability reports
  • Individual (personal) income tax
    • Progression extension
    • Changes in the exemption of non-financial benefits
    • Elimination of certain items deductible from the tax base and tax credits/reliefs
    • Limitation on exemption of income from the sale of securities and shares (ownership interests)
    • Limit for exemption of other income
    • Sickness insurance
    • Self-employed
    • Prolongation of tax measures in relation to Ukraine
  • Indirect tax
    • Value added tax (VAT), including unification of reduced VAT rates into a single 12% rate
    • Excise duties
    • Gambling tax
    • Real estate tax

Read a November 2023 report prepared by the KPMG member firm in the Czech Republic

 

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