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      At the beginning of September 2025, in the Czech Republic, a bill1 on single monthly employer reporting (Jednotné měsíční hlášení zaměstnavatele or “JMHZ”) was published in the “Collections of Laws” (Sbírka zákonů (Sb.)).  (For related coverage, see GMS Flash Alert 2025-084, 25 April 2025.)

      On 10 September 2025, the Chamber of Deputies also approved a proposal to amend related laws2, including the “Income Tax Act” (Zákon o daních z příjmů), that imposes information obligations on employers with respect to government authorities. The amendments will now proceed to the president for signature.

      WHY THIS MATTERS

      The introduction of single monthly employer reporting is expected to reduce the administrative burden on employers with respect to their employees.  Currently, employers must submit up to 25 separate reports to various institutions – including social security administrations, labour offices, the Ministry of Labour and Social Affairs, the Czech Statistical Office, and the tax authorities.  Under the new system, these will be consolidated into a single report to be filed by the employer within one deadline, thereby eliminating the repeated collection of the same data.

      The related amendment to the Income Tax Act not only implements the changes required for single monthly reporting but also introduces other significant provisions affecting personal income taxation in the Czech Republic, which will unify tax processes around withholding for some taxpayers; and with the changes to the stock option regime, small enterprises and start-ups are expected to reap some benefits.  (We describe these changes in more detail below.)

      More Details

      Although the “Act on single monthly employer reporting,”3 as a whole, is due to come into effect on 1 January 2026, the amending proposals have postponed certain registration duties of employers, including their obligation to send single monthly employer reports, until 1 April 2026, to give employers sufficient time to comply with these requirements.

      KPMG INSIGHTS

      The details of the data types that employers will be required to report on a monthly basis will be published by the government in the coming months.  It is expected primarily to include data on individual employees and occupations, including details of the monthly income paid to employees.  This will give the tax administration near real-time information on what income employees receive.

      Personal Income Tax Changes

      In addition to single monthly reporting, important amendments to personal income taxation have been approved, and include:

      • With effect from 2026, withholding tax on remuneration paid to corporate body members who are individuals and Czech tax non-residents will be abolished.  This will eliminate the inequality in taxation of these individuals based on their tax residence and remove the possibly tax-advantageous regime for Czech tax non-resident statutory representatives.

      • As of 2027, the withholding tax on income from dependent activity will be fully abolished.  This change will affect mainly income from agreements to perform work and income from small-scale employment that does not reach a given threshold and where the individual did not sign a declaration of a taxpayer.

      • The amendment will additionally abolish the annual limit of CZK 40 million for the tax exemption of income from the sale of securities and ownership interests in companies; the limit will be preserved only for the exemption of income from the sale of crypto assets.

      • The legislation further includes clarification that the tax-exempt non-financial leisure and health-related benefits provided by employers to their employees should not be wages, salaries, remuneration, or compensation for loss of earnings.  The clarification aims to mitigate salary and bonus swaps.

      • The Income Tax Act, for the first time, will include a completely new system of taxation of qualified employee stock options.  The new taxation system should support small businesses and start-ups by taxing the income from exercising the qualified stock option as “other income” instead of employment income.  As such, the income would be subject to tax but would not be subject to social security and health insurance contributions.

      KPMG INSIGHTS

      The implementation of single monthly employer reporting and the related amendment to the Income Tax Act are expected to substantially impact the obligations of both employers and employees in the Czech Republic with respect to various state authorities.

      The upcoming autumn parliamentary elections may further influence the direction and practical application of these developments.

      If employers have any questions or concerns about how the new reporting and proposed withholding rules apply to them, and what next steps need to be considered in order to be prepared to be in compliance, they should consult with their usual qualified tax advisers or a member of the tax team with KPMG in the Czech Republic (see the Contacts section).

      FOOTNOTES:

      1  “Act on single monthly employer reporting” (Zákon o jednotném měsíčním hlášení zaměstnavatele) – (in Czech) 323/2025 Sb.: 323/2025 Sb. Zákon o jednotném měsíčním hlášení zaměstnavatele .

      2  Parliamentary Print 926 – “Act on amendment of laws in relation to single monthly employer reporting” (Vládní návrh zákona, kterým se mění některé zákony v souvislosti s přijetím zákona o jednotném měsíčním hlášení zaměstnavatele) – (in Czech) Sněmovní tisk 926.

      3  See footnote 1. 

      Contacts

      Daniela Kralova
      Daniela Kralova

      Tax Advisor

      KPMG in Czech Republic

      Marie Smekalova
      Marie Smekalova

      Senior Tax Consultant

      KPMG in Czech Republic

      More Information

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      The information contained in this newsletter was submitted by the KPMG International member firm in the Czech Republic.

      GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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