Legislative changes affecting corporate taxes and VAT in Czechia in 2024

SME INFO CZ Nr.2024-1 – From January 2024, amendments to the VAT and Income Tax Acts will come into force. The changes are part of government’s consolidation package, and concern, in addition to tax rates, the tax deductibility of certain expenses.

Download here the English+Czech bilingual pdf of this newsletter:
Legislative changes affecting corporate taxes and VAT in Czechia in 2024

Change in Tax Rates

The corporate tax rate will in 2024 increase to 21% from current 19%.

Only one reduced VAT rate of 12% (instead of 10% and 15%) will apply. The base rate remains at 21%.

Tax deductibility

The tax deductibility of depreciation and rental costs for passenger cars is limited to CZK 2 million.
The tax deductibility of costs for certain employee benefits provided to family members of employees has been extended.
The tax deductibility of still wine up to CZK 500 has been cancelled.

Changes in VAT

The possibility of deducting VAT on the purchase of a company car is limited to CZK 420,000.

A number of supplies that were included in one of the reduced rates will now be included in the basic rate. These include beverages, transport, books, periodicals, medical devices, waste treatment.

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Former newsletters to review:

Part II Legislative changes impacting payroll in Czechia – SME Info Czechia 2023-04-2

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Part I Legislative changes impacting payroll in Czechia – SME Info Czechia 2023-04

The purpose of SME INFO is to provide general information and to draw the attention to the current changes in law which we believe to be important for the business operation of our clients. It is not a replacement for careful review of the acts and rules and the consultation with your tax advisor. © Copyrights 2023, Process Solutions, – All rights reserved

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