Full text of Act No. 90 / 2004 Coll.

Full text of Act No. 586 / 1992 Coll., on Income Taxes, as resulting from subsequent amendments

Valid
Contents
§ 1 ČÁST PRVNÍ § 2 § 3 § 4 § 5 § 6 § 7 § 7a § 7b § 7c § 8 § 9 § 10 § 11 § 12 § 13 § 14 § 15 § 16 ČÁST DRUHÁ § 17 § 17a § 18 § 19 § 20 § 20a § 20b § 21 ČÁST TŘETÍ § 22 § 23 § 23a § 23b § 23c § 23d § 24 § 25 § 26 § 27 § 28 § 29 § 30 § 31 § 32 § 32a § 32b § 33 § 34 § 35 § 35a § 35b § 36 § 37 § 38 § 38a § 38b § 38c § 38d § 38e § 38f § 38fa ČÁST ČTVRTÁ § 38g § 38ga § 38gb § 38h § 38ch § 38i § 38j § 38k § 38l § 38m § 38n § 38na § 38nb § 38o § 38p § 38r § 38s ČÁST PÁTÁ § 39 § 39a ČÁST ŠESTÁ § 40 § 41 § 42
90
PRESIDENT OF THE GOVERNMENT
Announces
No 2000 / 2000 Sb., No 2000 / 2000 Sb.
THE LAW
on income taxes
The Czech National Council decided on this law:
§ 1
This law governs
(a) income tax on natural persons;
(b) corporation tax.

ČÁST PRVNÍ

TAX FROM THE REVENUE OF PHYSICAL PERSONS
§ 2
Taxes on personal income tax
(1) The taxable persons are natural persons ("taxpayers").
(2) Taxpayers who are resident or usually resident in the Czech Republic have a tax liability which covers both income from sources in the Czech Republic and income from sources abroad.
(3) The taxpayers not mentioned in paragraph 2, or those covered by international agreements, shall have a tax liability which applies only to income generated from resources in the Czech Republic (§ 22). Taxpayers who only stay in the Czech Republic for the purpose of study or treatment have a tax liability which applies only to income generated from resources in the Czech Republic even if they usually reside in the Czech Republic.
(4) The fees normally present on the territory of the Czech Republic are those who stay here for at least 183 days in the relevant calendar year, continuously or in several periods; within a period of 183 days, each starting day of stay shall be counted. A residence in the Czech Republic is for the purposes of this law a place where the taxpayer has a permanent apartment in circumstances from which his intention to stay permanently in this apartment can be assumed.
§ 3
Subject matter of natural person income tax
(1) The subject of the income tax on natural persons (hereinafter referred to as "tax ') shall be:
(a) income from dependent activities and functional benefits (Section 6);
(b) income from business and other self-employed activities (Section 7);
(c) income from capital assets (Section 8),
(d) rental income (Section 9);
(e) other revenue (Section 10).
(2) Income within the meaning of paragraph 1 shall mean income from both monetary and non-monetary gains and from exchange.
(3) Non-monetary income shall be valued in accordance with a specific law, 1a) unless otherwise provided by that law.
(4) The tax is not applicable
(a) revenue obtained by the acquisition of shares or units in accordance with a special law governing the conditions for the transfer of State assets to other persons, (1) by inheritance, issue of m2) or by the donation of real estate or movable property or property rights, with the exception of income accruing therefrom and with the exception of donations received in connection with the pursuit of an activity under Paragraph 6 or with a business or other self-employed activity; the subject of tax on natural persons, on educational and health establishments and on facilities for the protection of abandoned animals, or on endangered species, but income is not derived from the acquisition of a gift in connection with the operation of such activities,
(b) loans and loans excluding:
1. the income acquired by the creditor from the loan or loan repaid by the transfer of the debt arising from the loan or loan, at an amount equal to the difference between the income resulting from the repayment of the loan or loan and the price at which the debt was transferred,
2. the income of the tax payer who keeps the tax register from an even-term loan from a note to which the claim is payable,
(c) income from the extension or narrowing of the joint capital of spouses, 1b)
(d) income resulting from a fair settlement granted by the European Court of Human Rights of an amount which the Czech Republic is obliged to pay or from an amicable settlement of a matter before the European Court of Human Rights of an amount which the Czech Republic has undertaken to pay. 1c)
§ 4
Exemption
(1) Exemptions shall be granted:
(a) income from the sale of a family house, an apartment, including a share in the common parts of the house or a joint ownership interest, including the related land, provided that the seller was resident there for at least 2 years immediately prior to the sale. In order to exempt the income of the spouses of their joint ventures, it is sufficient that only one of the spouses fulfils the conditions for the exemption, if the property to which the exemption relates is not or is not included in the commercial property of one of the spouses. The exemption shall not apply to income from the sale of that apartment or house where it is or has been included in a commercial property for the pursuit of a business or other self-employed activity, within 2 years of its removal from the commercial property. In addition, the exemption does not apply to revenue generated by the taxpayer from the future sale of a family home, apartment, including a share in the common parts of the house or a joint ownership interest in that property, including the related land, carried out within 2 years of the acquisition, and the future sale of a family house, apartment, including a share in the common parts of the house or co-ownership of that property, including the related land, carried out within 2 years of its disposal, even if the purchase contract is concluded after 2 years of the acquisition or 2 years of the disposal,
(b) revenue from the sale of real estate, flats or non-residential premises not referred to in (a), if the period between acquisition and sale exceeds five years. In the case of sale of real estate, flats or non-residential premises acquired by inheritance from a deceased who has been a relative in a series of direct or spouse, the period of five years shall be reduced by the period during which the property was evidently owned by the deceased or the deceased if the property was acquired by successive inheritance in a series of direct or spouse. The exemption shall not apply to income from the sale of real estate, flats or non-residential premises, including those referred to in paragraph 1 (g), provided that they are or have been included in commercial property for the pursuit of business or other self-employed activities, within five years of their being set aside. In addition, the exemption does not apply to revenue accruing to the taxpayer from the future sale of real estate, apartment or non-residential premises, carried out within five years of the acquisition, and from the future sale of real estate, flat or non-residential premises, carried out within five years of their decommissioning, even if the purchase contract is concluded only five years after the acquisition or five years after the disposal. In the case of the sale of land acquired by the seller from the land office in exchange for land modification under special legislation, 87) the period of 5 years shall be reduced by the period during which the seller owned the original land that was exchanged and that period shall also be counted against the period running from the decommissioning of the transferred land from the commercial property,
(c) revenue from the sale of movable goods. The exemption shall not apply to revenue from the sale of motor vehicles, aircraft and ships, provided that the period between acquisition and sale does not exceed one year. The exemption shall not apply to income from the sale of movable property, including income from the sale of movable property referred to in paragraph 1 (g), provided that they are or have been included in the commercial property for the pursuit of the business and other self-employed activities of the taxpayer within five years of their being excluded from the business property,
(d) the compensation received, the compensation for non-property damage, the performance of property insurance and the performance of liability insurance for damage, except payments received for loss of income and payments received as compensation for damage caused to property which was included in the commercial property for the pursuit of the business or other self-employed activity at the time of the occurrence of the loss of property, or for compensation for damage caused to property used at the time of the hire, and the performance of liability insurance for damage caused in connection with the business or other self-employed activity of the taxpayer and for damage caused by the hire by the person;
(e) revenue from the operation of small hydropower plants up to 1 MW, wind power plants, heat pumps, solar installations, biogas and wood gas plants, electricity or biomass heat plants, biodegradable plants, geothermal energy facilities (hereinafter referred to as "installations"), in the calendar year in which they were first put into service, and in the next five years. The first entry into service shall also be considered as the putting into service of the equipment on the basis of which revenue has been generated or generated by the taxpayer, as well as cases where a small hydropower plant up to 1 MW has been reconstructed if the revenues from that small hydropower plant up to 1 MW have not already been exempted. The period of exemption shall not be interrupted even in the case of withdrawal due to technical evaluation (§ 33) or repair and maintenance,
(f) the price of the tender, the advertising competition or the advertising composition, unless it is a consumer lottery under special legislation12) and the price of the sports competition with a value of not more than CZK 10 000, excluding the price of the sports competition for taxpayers for whom the sports activity is a business (§ 10 (8)). However, the tender price and the similar foreign price shall be exempt entirely if it has been donated in full by the beneficiary for the purposes referred to in Article 15 (8),
(g) refunds received in connection with the correction of certain property injustices under special legislation, (2) income from the sale of real estate, movable property or securities issued under special legislation2) and interest on government bonds issued in connection with the rehabilitation proceedings for redress. Revenue from the sale of real estate issued in connection with the correction of certain property injustices under special legislation2) shall be exempt even if, between the acquisition and sale of the property, a settlement has occurred between the joint-owners by division of the property according to the size of its holdings (1d) or if the housing or non-residential premises have been defined as units under a specific law,
(h) income obtained in the form of sickness insurance benefits and services (sickness care), 42) pension insurance under the Pension Insurance Act, 43) state social assistance, 44) monetary assistance to victims of crime under the Special Act, 44a) social security, 45) performance from the application of the State policy instruments of employment46) and general health insurance 47) and performance from foreign compulsory insurance of the same kind; However, if it is income in the form of regularly paid pensions (pensions), only an amount of CZK 144,000 per year is exempt from tax from the sum of such income,
(ch) income received as part of the maintenance obligation or compensation for such income under the Family Act or similar transactions provided from abroad;
(i) social welfare benefits and services, state social support benefits and state benefits (contributions) provided for by specific regulations or similar services provided from abroad;
(j) remuneration paid to health care authorities for blood collection and other biological materials from the human organism;
(k) scholarships (2a) from the state budget of the county budget and from the public higher education institution and similar transactions granted from abroad, aid and contributions from the funds of foundations, foundations and civil associations (48), including similar transactions provided from abroad and non-monetary performance, social assistance provided by the employer from the cultural and social needs fund (2b) to the nearest survivors and social assistance to the nearest survivors of the social fund (after-tax profits) under similar conditions for employers not covered by this Regulation, except for compensation for loss of income and payments having the character of income under § 6 to 9;
(l) benefits from the insurance of persons, except in the case of life insurance in the case of life expectancy, in the case of life expectancy in the case of death or life expectancy and in the case of life expectancy in the case of pension insurance, and with the exception of other income from the insurance of persons who are not insured and do not constitute the termination of the insurance contract,
(m) performance provided by the armed forces to soldiers in the primary (replacement) service, (3a) pupils of schools who are not in active duty, soldiers in reserve called for training and soldiers in active reserve voluntary according to special legislation, 3a)
(n) disciplinary fees paid to members of the armed forces and corps under special regulations, 3)
(o) service and housing allowances for professional soldiers and claims related to the termination of service of members of the security corps and services and members of the customs administration of the Czech Republic, under special legislation, 3)
(p) services provided to citizens in connection with the performance of civil service, 4)
(r) revenue from the transfer of cooperative member rights, the transfer of shareholdings in the transformed cooperative (13) or the transfer of shareholdings in companies, not involving the sale of securities, exceeds the period between acquisition and transfer of five years. The period of 5 years between the acquisition and transfer of the members' rights of the cooperative, the shareholding in the transformed cooperative (13) or the participation in a trading company, not including the sale of securities, is reduced by the period during which the taxpayer was a member of a trading company or a member of a cooperative before the transformation of that company or cooperative. If the conditions set out in § 23b or § 23c are met, the period of 5 years between acquisition and transfer shall not be interrupted when the shares, merger or division of the company are exchanged. The exemption shall not apply to income arising from the transfer of members' rights to the cooperative or from the transfer of participation in companies, provided that they have been acquired from the commercial property of the taxpayer within five years of the end of his business or other self-employed activity. Furthermore, the exemption shall not apply to revenue accruing to the taxpayer from the future transfer of the members' rights of the cooperative, from the transfer of an additional share in the transformed cooperative or from the transfer of a participation in companies within five years of the acquisition and future transfer of the members' rights of the cooperative or from the transfer of a participation in companies acquired from its business assets, provided that the income from such transfer is generated within five years of the termination of the business or other self-employed activity of the taxpayer, even if the transfer contract is concluded only five years after the acquisition or the end of the business or other self-employed activity;
(s) interest on deposits from building savings, including interest on State aid under special law, 4a)
(t) subsidies from the state budget, from the budget of municipalities, regions, state funds, the National Fund, from grants awarded or contributions from the state budget granted under special legislation13c), or grants, grants and contributions from the European Communities, to the acquisition of tangible property, to its technical evaluation or to the elimination of the consequences of natural disaster (§ 24 (10), with the exception of subsidies and contributions charged to revenue (revenue) under special legislation, 20)
(u) the income obtained in the form of the acquisition of ownership of the apartment as a replacement for the release of the apartment, and the refund (severance payment) for the release of the apartment paid to the user of the apartment on condition that the refund (severance payment) was used or used to satisfy the housing requirement no later than one year after the year in which the refund (severance payment) was accepted. This income is also exempt if the amount corresponding to the refund (severance grant) has been spent on the provision of housing needs (4e) within one year before its receipt. The taxpayer shall notify the tax administrator of the acceptance of the refund (severance grant) by the end of the tax period in which it was received. Similarly, income from the transfer of rights and obligations relating to membership of the cooperative shall be treated as income if, in connection with such transfer, the lease contract to the apartment is cancelled if the taxpayer uses the funds obtained to satisfy the housing needs,
(v) the interest income of the taxpayers referred to in Article 2 (3), which is derived from bonds issued abroad by taxpayers established in the Czech Republic or the Czech Republic,
(w) income from the sale of securities acquired by the taxpayer under coupon privatisation; revenue from the sale of other securities, if the period between the acquisition and transfer of such securities on sale or repayment exceeds 6 months, and income from the share share held on cancellation of the holding fund, if the period between the acquisition of the holding sheet and the date of payment exceeds 6 months. The period of 6 months between the acquisition and transfer of the security for the same taxpayer shall not be interrupted when the investment fund is converted into an open holding fund, when the closed holding fund is converted into an open holding fund, when the owner of the holding fund is changed, when the mutual funds are merged and merged, merged and divided. The exemption does not apply to income from the sale of securities that are or have been included in commercial property within 6 months of the end of the business or other self-employed activity (§ 7) and to income from capital assets (§ 8). Furthermore, the exemption does not apply to the proceeds from the sale of securities acquired by a limited liability company's shareholder, a limited partnership or a member of a cooperative in the conversion of a commercial company or cooperative into a public limited company under special law, 13a) within 5 years of the acquisition of such securities. The exemption does not apply to the income from the share of the mutual fund at the time of the cancellation of 34c) of the mutual fund or to the change of the investment fund into an open mutual fund which was or is included in the commercial property within 6 months of the end of the business or other self-employed activity (§ 7). A period of 6 months or 5 years between the acquisition and transfer of a security shall be reduced by the period for which the taxpayer was a member of a trading company or a cooperative before the transfer of that company or cooperative to a public limited company. In the exchange of shares by the issuer for other shares of the same total nominal value, the period of 6 months or 5 years between the acquisition and transfer of securities with the same taxpayer shall not be interrupted; Similarly, exchanges of shares, mergers or divisions of companies shall be carried out where the conditions set out in Section 23b or Section 23c are met. The exemption shall not apply to revenue accruing to the taxpayer from future sales of securities made within 6 months of the acquisition and future sales of securities which are or have been included in commercial property within 6 months of the termination of the business or other self-employed activity (§ 7), even if the purchase contract is not concluded until 6 months after the acquisition or 6 months after the end of the business or other self-employed activity (§ 7),
(x) income arising from the write-off of liabilities in the event of a settlement or a forced settlement made under a special law governing bankruptcy and settlement, 19a)
(y) interest income on mortgage bonds, 4d)
(d) income from interest on overpayments due by the tax administrator, 49) by the social security administration (50) and income from periodic penalty payments of premiums recovered by the health insurance undertaking concerned after the expiry of the period laid down for the decision on overpayment of premiums, 51)
(za) revenue generated in the form of a gift received in connection with a business or other self-employment activity as an advertising item bearing the commercial name or trademark of the provider of the gift, the value of which does not exceed CZK 500;
(zb) severance grant on termination of employment of members of the Fire Rescue Corps of the Czech Republic, under special legislation, 64)
(zc) income of the acquirer of the apartment, garage and studio, or co-ownership of the non-residential space, received in connection with the mutual settlement of funds pursuant to § 24 (7) and (8) of the Housing Act, 60)
(zd) deleted
(z) revenue generated in the form of a compulsory copy pursuant to special legislation 64a) and in the form of an author's copy, in the normal number, adopted in connection with the use of the subject of copyright or copyright law;
(zf) income generated as compensation for the material burden incurred by law or by a decision of a public authority under a special law, 4c)
(zg) foreign exchange exchange exchange exchange exchange exchange exchange exchange exchange exchange exchange foreign exchange exchange exchange exchange exchange exchange exchange exchange exchange exchange exchange exchange exchange exchange exchange exchange interest rate
(zh) performance provided in connection with the performance of the volunteer service under special legislation, 4h)
(z) income generated in the form of gifts provided for the operation of a zoo, the operator of which holds a valid licence, 4i)
(j) income from advertising made possible through the operation of a zoo, the operator of which holds a valid licence, 4i)
(zk) income of the owner of the apartment or non-residential space
1. resulting as a result of the reimbursement of expenses (costs) for the repair, maintenance and technical evaluation of the common parts of the house with apartments and non-residential premises owned under the special legislation on the ownership of by60) in kind, provided that this results from a contract for the construction of another apartment or non-residential space, or parts thereof, provided that the owners of the apartments and non-residential premises in the house agree in writing to pay the said costs and expenses other than the amount of the co-ownership shares in the common parts of the house, or so provided for in specific legislation, 60)
2. resulting as a result of the reimbursement of expenses (costs) for the repair, maintenance and technical evaluation of the common parts of the house with apartments and non-residential premises owned by the special legislation on the ownership of flats (60) by the other owner of the apartment or non-residential space in the house in kind, at an amount exceeding the obligation of the owner of the apartment or non-residential space in the house to pay the said costs and expenses, depending on the size of the co-ownership interest in the common parts of the house, provided that the owners of apartments and non-residential premises in the house agree in writing on the reimbursement of the said costs and expenses other than those of the shares in the common parts of the house, or thus provide for special legislation, 60)
(zl) income resulting from the top-up payment 70a) in the conversion, exchange of shares, merger of companies or division of a company to which the shareholder is entitled in accordance with the special legislation, 70a) is exempt if it relates to:
1. shares for which the period between the acquisition and the operative date of the conversion, the exchange of shares, the merger of companies or the division of the company has exceeded 6 months. The exemption does not apply to shares which are or have been included in commercial property for a period of 6 months after the end of the business or other self-employed activity (§ 7),
2. an interest in a company for which the period between the acquisition and the operative date of the conversion, the exchange of shares, the merger of companies or the division of a company has exceeded 5 years. The exemption does not apply to shares which are or have been included in commercial property for a period of 5 years from the end of the business or other self-employed activity (§ 7),
(m) compensation (contributions) of accommodation expenses provided by the institutions of the European Union to staff (national experts) posted to the institutions of the European Union.
(2) The period between acquisition and sale referred to in paragraph 1 (a) or (b) shall not be interrupted if the period between acquisition and sale took place:
(a) settlement between the share owners of the house, including the relevant proportion of the common areas or family home, including the associated land, by division according to the size of their shares;
(b) that there were apartments or non-residential spaces in the building defined as units under special legislation, 60)
(c) the termination or settlement of the joint venture of spouses. 4g)
(3) The exemption referred to in paragraph 1 (e) shall not apply where the taxpayer renounces the exemption by notifying the tax administrator not later than within the time limit for filing the tax return for the tax period in which those resources and equipment were put into service. the exemption in that case shall not apply even to the lease of such facilities or to the transfer of ownership of such resources and equipment to another owner.
(4) For the purposes of natural persons' income tax, commercial property means the sum of property values (goods, claims and other rights and the money of valued other values) owned by the taxpayer, which have been or are accounted for or entered in the records of assets and liabilities for the purposes of determining the taxable and income tax base (hereinafter referred to as "tax records'). The date on which the property was removed from the property of the taxpayer is the date on which the taxpayer last charged the property (20) or entered it in tax records.
§ 5
Tax base and tax loss
(1) The basis of the tax is the amount by which the income generated by the taxpayer in the tax period, which is considered to be a calendar year for the purposes of the tax on the income of natural persons, exceeds the expenditure evidently incurred to achieve, secure and maintain it, unless otherwise provided for in paragraphs 6 to 10.
(2) In the case of a taxpayer who receives at the same time two or more of the types of income referred to in paragraphs 6 to 10 during the tax period, the taxable amount shall be the sum of the sub-bases of the tax determined by type of income, using the provisions of paragraph 1.
(3) Where, according to accounting, tax records or records of revenue and expenditure, expenditure exceeds the revenue referred to in Sections 7 and 9, the difference shall be a loss. The loss adjusted pursuant to § 23 ("tax loss') shall be reduced by the sum of the sub-bases of the tax determined on the basis of the types of income referred to in § 7 to 10, using the provisions of paragraph 1. This tax loss or part thereof which cannot be applied to taxation of income in the tax period in which it was incurred may be deducted from the sum of the sub-bases of tax determined by type of income referred to in paragraphs 7 to 10 in the subsequent tax periods referred to in paragraph 34. A tax loss (or part of it) which has not been deducted from its taxable base by the deceased with income pursuant to § 7 or 9 may be deducted from the tax base by the heir if the heir continues to operate the deceased no later than 6 months after his death; the tax loss may be deducted from the tax base for a maximum of 7 tax periods following the tax period for which the tax loss is calculated.
(4) Income from dependent activities and functional benefits (Section 6) resulting from the taxpayer not more than 31 days after the end of the tax period for which they were obtained shall be regarded as income from that tax period.
(5) The tax base does not include income exempt from tax and income for which it is further established that the tax is levied at a special tax rate under Paragraph 36 on the tax base. Furthermore, income on which the tax is levied on a separate tax base is not included in the tax base under Paragraph 16 (2).
(6) The income included in the tax base (sub-tax base) in the previous tax periods which have been repaid shall be reduced by income (income) or increased by expenditure (costs) in the tax period in which its recovery took place, provided that there is a legal reason for its recovery and that the income is not recorded in the accounts or tax records of the taxpayer when the tax base (sub-tax base) is established in accordance with paragraphs 7 and 9. Similarly, expenditure (costs) used as expenditure (costs) to achieve, secure and maintain revenue shall be treated in the same way, in the absence of compliance with the conditions laid down for its application as expenditure (costs) to achieve, secure and maintain revenue. In the case of amounts used as expenditure (cargo) in previous tax periods for which there is a legal basis for repayment by the beneficiary, these amounts shall be increased by income (revenue) or reduced by expenditure (costs) in the tax period when the legal basis for application has been removed, provided that the refund has not been recorded in the accounts or in the tax records of the taxpayer in determining the taxable base (sub-tax base) in accordance with § 7 and 9. The income from dependent activities and functional benefits included in the tax base (basis for calculating the tax advance) for which there is a legal basis for recovery shall be reduced for the taxpayer by the income from dependent activities and functional benefits in the calendar month or in the following calendar months in the tax period in which the refund took place.
(7) In the case of a taxpayer with income pursuant to paragraphs 7 and 9, account shall be taken of the stocks acquired in the calendar year preceding the year in which he began his activity or of the stocks obtained from the inheritance after the deceased who had the income referred to in paragraphs 7 or 9, provided that the heir continues to operate the deceased no later than six months after his death. The same applies mutatis mutandis to other expenditure necessarily incurred in connection with the start of the activity.
(8) The transfer from accounting to tax records shall take place in accordance with Annex 2 to this Law. The transfer from tax records to accounting shall be carried out in accordance with Annex 3 to this Act.
(9) For the taxpayers referred to in § 2, the value of the claim shall be the nominal value or cost of the claim acquired by the transfer or the price determined for the purposes of tax inheritance or donation for the claim acquired by inheritance or donation. For taxpayers who are or were parties to value added tax at the time of the claim, the value of the claim shall be reduced by the amount of value added tax, provided that their own exit tax has been met.
(10) The difference between revenue and expenditure is increased by
(a) the amount of the liability which has ceased to exist other than its fulfilment by offsetting by means of an agreement between the creditor and the debtor, which replaces the existing liability by a new commitment, and a settlement under a specific law. 88) This shall not apply to obligations on contractual fines, interest on late payments, late payments and other penalties on obligations, and to commitments the reimbursement of which would be expenditure reducing the tax base or increasing tax losses,
(b) the value of advances paid by a taxpayer with income pursuant to § 7, which does not keep accounts and expenditure pursuant to § 24, to a taxpayer who is a person of economic or staffing or otherwise linked (§ 23), who keeps accounts, except for advances in respect of rent in respect of financial leasing with subsequent purchase of the hired item, if the total liability has not been cleared in the tax period in which the advances were paid;
(c) the income generated by the tax payer who keeps the register from the bill covering the claim in the case of income subject to tax pursuant to Article 3;
(d) an amount equal to the valuation of the non-cash contribution less the amount of the contribution paid by the trading company to the member of the cooperative.
(11) The difference between income and expenditure shall be reduced by the value of advances paid by the taxpayer with revenue pursuant to § 7, which does not keep accounts and expenditure in accordance with § 24, to a taxpayer who is an economic or personal person or otherwise linked (§ 23), who keeps accounts, with the exception of advances on rent in respect of financial leasing with the subsequent purchase of the hired item, by which the tax base referred to in paragraph 10 has increased, in the tax period in which the total liability has been charged.
§ 6
Revenue from dependent activities and functional benefits
(1) Revenue from dependent activities
(a) income from the current or former employment, professional or member relationship and the similar relationship in which the payer is obliged to follow the instructions of the payer in the course of his work for the payer's income. These revenues are also income for the work of pupils and students from practical training,
(b) income for the work of members of cooperatives, associates and managers of limited liability companies and commanditists of limited companies, even if they are not required to follow the orders of the payer in the course of their work for the cooperative or company;
(c) remuneration of members of statutory bodies and other legal entities;
(d) revenue generated in connection with the current, future or earlier performance of the dependent activity referred to in points (a) to (c) or function, whether or not derived from the payer for whom the payer carries out the dependent activity or function, or from the payer for which the payer does not perform the dependent activity or function.
(2) The taxpayer with income from dependent activities and functional benefits is hereinafter referred to as "employee," the income payer as "employer." The employer shall also be the taxpayer referred to in Article 2 (2) or Article 17 (3), with whom the staff member carries out the work according to his or her orders, even if the income for that work is paid on the basis of a contractual relationship through a person established or residing abroad. In view of other provisions of the law, the income thus paid shall be considered as income paid by the taxpayer referred to in § 2 (2) or § 17 (3). Where the employer's remuneration includes an amount for mediation to a person having his registered office or residence abroad, at least 60% of the total remuneration shall be deemed to be the employee's income.
(3) The revenue referred to in paragraph 1 shall mean revenue on a regular or one-off basis, whether or not it is a legal claim to it, whether it is received from the employer by the employee or by a person to whom the right has been transferred under the special rules, 4b) and whether it is paid or credited to good or consists of a different form of performance by the employer for employees who are liable for dependent income. The income shall also mean the amount by which the employer pays the employee for the rights, services or goods provided, other than the flat in which the employee was resident for two years immediately before his purchase, less than the price established under the special legislation, 1a) or the price charged to other persons, as well as the amount fixed in accordance with paragraph 6.
(4) Receipts cleared or paid by an employer having its registered office or resident in the Czech Republic and revenue from taxpayers defined in § 38c are, after a reduction in accordance with paragraph 13, a separate tax base for taxation at a specific tax rate as provided for in § 36 (2) (c), in the case of revenue referred to in paragraph 1 (a) and (d) and in accordance with paragraph 10, the aggregate amount of which for the same employer shall not exceed CZK 5 000 in the calendar month. This is the case for income charged or paid by the employer, for which the employee has not signed the VAT declaration pursuant to Paragraph 38k (4) or (5).
(5) If the revenue referred to in paragraph 4 is derived from sources abroad, the tax base (sub-base of tax) shall be that provided for in Article 5 (2).
(6) If the employer provides the employee with a motor vehicle free of charge for service and private use, an amount of 1% of the entry price (Paragraph 29) of the vehicle shall be considered as the employee's income for each calendar month of delivery. If it is a hired vehicle, the input price of the vehicle shall be based on the original owner, even if the subsequent purchase of the vehicle occurs. Where value added tax is not included in the entry price, it shall be increased for the purposes of this provision. If the amount to be considered as the employee's income for each and every calendar month of delivery of the vehicle is less than CZK 1,000, the employee's income shall be regarded as an amount of CZK 1,000. Where the employer provides employees, free of charge, in the course of a calendar month, with several consecutive motor vehicles for service and private use, an amount of 1% of the maximum entry price of the motor vehicle shall be deemed to be the employee's income. If the employer provides the employee, free of charge, with more than one motor vehicle at the same time during a calendar month, an amount of 1% of the total entry price of all motor vehicles used for both professional and private purposes shall be considered as the employee's income.
(7) They are not regarded as income from dependent activities and the subject of tax, other than income which is not subject to tax pursuant to Paragraph 3 (4), are not:
(a) reimbursement of travel expenses provided in connection with the exercise of dependent activity up to the amount laid down in the special regulation, as well as the value of meals provided by the employer on business trips;
(b) the value of personal protective equipment, washing, cleaning and disinfection equipment provided to the extent specified by the special regulation, (5a) including the cost of maintaining personal protective equipment and working equipment, as well as the value of the uniforms provided, including maintenance allowances, and the value of the working clothes intended by the employer, including the maintenance allowances;
(c) the amounts received by the employer's employer in order to give them up on his behalf or the amounts by which the employer pays the staff member the declared expenses he has incurred for the employer, as if directly incurred by the employer;
(d) compensation for the wear of own tools, equipment and items needed for the performance of the work provided by employees under the Labour Code.
(8) Where the employer pays the employer's expenditure (compensation) referred to in paragraph 7 (b) to (d) a flat-rate amount, such expenditure shall be deemed to have been declared up to the flat-rate amount laid down in the special rules or the flat-rate laid down in the collective agreement or in the employer's internal rules, provided that the flat-rate amount has been established by the employer on the basis of actual expenditure calculations. The same procedure shall be followed by the employer in determining the flat-rate in cases where the conditions under which the flat-rate has been fixed have changed. If they are flat-rate using their own tools, equipment and items necessary for the performance of the work of the employee, which would otherwise be amortised, they shall be recognised only to the extent that the employer would apply depreciation of comparable tangible assets on a level playing field in subsequent years of depreciation.
(9) In addition to the income referred to in Section 4, tax exemptions are also granted:
(a) the amounts spent by the employer on training staff related to his business; the exemption does not apply to amounts paid to employees as compensation for income foregone,
(b) the value of meals provided as non-monetary benefits by the employer to workers for consumption at the workplace or in the framework of competitive meals provided through other entities;
(c) the value of non-alcoholic beverages provided as non-monetary benefits by the employer to workers for consumption at the workplace;
(d) non-monetary benefits provided by the employer to employees of the fund of cultural and social needs, 6a) from the social fund, from profits (income) after tax, or from expenditure (costs) which are not expenditure (costs) to achieve, secure and maintain income, in the form of the possibility to use recreational, medical and educational facilities, pre-school facilities, racing libraries, gym and sports facilities, or in the form of a contribution to cultural programmes and sports events; However, if there is a provision of recreation, including tours, the staff member shall be exempt from the value of non-monetary benefits in total of up to CZK 20,000 per calendar year. The performance of the employer shall also be assessed by the staff member for the family members of the staff member,
(e) the amounts which the employer is obliged to pay under the Special Regulations (21) for social security insurance, for the contribution to the state employment policy, for health insurance and for staff covered by compulsory foreign insurance of the same type, the contributions to such foreign insurance,
(f) an advantage granted by an employer engaged in public transport of persons to its employees and their family members in the form of free or discounted tickets;
(g) income of members of housing cooperatives from the personal performance of self-help cooperative housing construction not paid in cash but credited to their membership shares;
(h) income from dependent activities carried out on the territory of the Czech Republic resulting from the fees referred to in Article 2 (3) from employers having their registered office or resident abroad, provided that the period of time related to the performance of such activities does not exceed 183 days in any period of 12 months consecutive; the exemption does not apply to revenue from the activities of artists, athletes, artists and co-performers acting in public and to revenue from activities carried out in a permanent establishment (Section 22 (2)),
(ch) the value of non-cash donations provided from the fund of cultural and social needs under the relevant regulation, 6a) for employers not covered by this regulation, the value of non-cash donations provided under similar conditions from social funds or from profit (income) after tax, or of expenses (expenses) which are not expenses (expenses) to achieve, secure and maintain income, up to a sum of CZK 2,000 per year for each employee;
(i) cash performance for equipment and commissions provided to members of the armed forces and corps under special regulations, 6b)
(j) compensation for loss of service income (salary) granted to members of the armed forces and corps under special regulations, 6c)
(k) the value of the transitional accommodation, not for work-related accommodation, provided as non-monetary benefits by the employer to employees in connection with the performance of the work, unless the municipality of the transitional accommodation is identical to the municipality where the employee resides;
(l) pay compensation paid under special rules 6d) equal to the difference between sickness insurance benefits;
(m) compensation for loss of pension granted under the Labour Code for the period before 1 January 1989 and paid after 31 December 1992;
(n) a cash advantage resulting from the provision of interest-free loans or loans with interest below the normal rate of interest by the employer of the fund of cultural and social needs in accordance with the special regulation (6a) and employers not covered by this regulation, from the social fund or from the profit (income) after tax, if the repayable loans provided to the employees for housing purposes are up to CZK 100,000 or to bridge the difficult financial situation up to CZK 20,000 and the employee affected by the natural disaster up to CZK 1 000 for residential purposes and up to CZK 200 000 to bridge the precarious financial situation;
(o) the monetary contribution to the renewal of granted in kind of uniform customs formalities;
(p) the specific surcharge granted in foreign currency to members of the armed forces and the Security Corps seconded to UN peacekeeping forces outside the territory of the Czech Republic (6e) for the duration of the operation abroad,
(r) a monetary contribution to the renewal of the granted uniform legal requirements of a member of the fire brigade;
(s) severance grants pursuant to Decree No. 19 / 1991 Coll., on the employment and physical security of workers in the mining industry who are not fit for work in the long term, paid to workers who have been reassigned or released for medical reasons for occupational risk, occupational disease, accidents at work or diseases arising from or worsening of the effects of the working environment;
t) income up to CZK 500,000 provided by the employer as social assistance to employees directly linked to the bridging of their extremely difficult circumstances due to natural disasters, environmental or industrial accidents in territories where an emergency has been declared, 65) provided that such income is paid out from the cultural and social needs fund) or from the social fund under similar conditions for employers not covered by the regulation on the cultural and social needs fund or from profits (income) after tax or from expenditure (costs) which are not expenditure (costs) to achieve, secure and maintain income;
(u) the employer's contribution to supplementary pension insurance with a State contribution to the account of its staff member with a pension fund, 9a) but up to a maximum of 5% of the staff member's assessment base for social security contributions and a contribution to national employment policy, 21)
(v) in kind and reimbursement of expenses equivalent to the monetary value of the kind provided under the special legislation6g) to representatives of the State and certain state bodies and judges;
(w) the amount of the insurance premiums paid by the employer to the employee for his life insurance or for death or retirement or pension insurance, including in the event of an earlier performance in the event of an entitlement to an old-age pension or a full disability pension, or in the case of an employee who becomes fully disabled under the Pension Insurance Act or in the case of death (hereinafter referred to as "private life insurance"), on the basis of an insurance contract concluded between the employee as a policyholder and an insurance undertaking which is entitled to an insurance activity within the territory of the Czech Republic under a special legislation, 89) on condition that the payment of insurance benefits was agreed after 60 calendar months and at the earliest the year of the age of 60 years, but up to a maximum of 12 000 CZK per year from the same employer. This applies in cases where the insured employee is entitled to the benefit of these insurance contracts and if the insured person is the insured person's death, the person designated under Section 817 of the Civil Code, except for the employer who paid the insurance,
(x) the amounts incurred by the employer to cover the expenses associated with the payment of the salary and the deductions from the salary of the staff member, the payment of the insurance contribution (additional insurance) to the staff member, as well as the amounts incurred by the employer to cover the expenses associated with the provision of non-cash benefits to the staff member.
(10) Functional benefits are:
(a) the functional salaries of members of the Government, Members and Senators of the Parliament of the Czech Republic and the salaries of the Heads of Central Authorities;
(b) remuneration for the performance of duties in the institutions of the municipalities, other local authorities, state bodies, civil and interest associations, chambers and other institutions.
(11) They shall not be regarded as a functional benefit and shall not be the subject of a tax on the reimbursement of expenses rendered in connection with the performance of a function to which entitlement under the special rules arises, except for the reimbursement of income foregone. The income of experts and interpreters, collective disputes brokers and arbitrators shall not be considered to be functional benefits. 6f)
(12) Paragraphs 7, 8 and 9 shall apply mutatis mutandis to transactions provided in connection with the performance of functions.
(13) The tax base (sub-base) shall be income from dependent activity or functional benefits, with the exception referred to in paragraphs 4 and 5, less the amount of social security premiums deducted or paid by the employee, the contribution to the state employment policy and the general health insurance premium, which is required under the Special Regulations (21); for staff covered by compulsory foreign insurance of the same type, contributions to such foreign insurance. For the taxpayers referred to in Article 2 (2), the basis of the tax shall be their income from dependent activities carried out in a State with which the Czech Republic has not concluded a double taxation contract, less the tax paid on that income abroad and deducted or paid by the employee of the insurance contributions payable under the first sentence.
§ 7
Revenue from business and other self-employment
(1) Entrepreneurship income is
(a) income from agricultural production, forestry and water management, 7)
(b) business income, 8)
(c) income from other business according to special rules;
(d) the shares of the shareholders of the public commercial company and the associates of the limited partnership company in profit.
(2) Revenue from other self-employed activities, in so far as they do not fall within the income referred to in Section 6, is:
(a) revenue from the use or provision of industrial or other intellectual property rights, copyright rights, including related rights of copyright law, 9), including revenue from the issue, reproduction and dissemination of literary and other works,
(b) income from the pursuit of an independent profession which is neither business nor business under special rules;
(c) income of expert, interpreter, broker of collective disputes, broker of collective and collective agreements under copyright law, arbitrator for activity under special legislation, 6f)
(d) income from the activities of the liquidator, including income from the activities of the interim administrator, the special administrator, the representative of the administrator and the equalisation administrator, which are neither business nor business under special legislation. 19a)
(3) The basis of the tax (sub-base) is the revenue referred to in paragraphs 1 and 2 with the exception referred to in paragraph 8. This revenue shall be reduced by the expenditure incurred to achieve, secure and maintain it, with the exception of the revenue referred to in paragraph 1 (d). Paragraph 23 to 33 shall apply to the determination of the tax base (sub-tax base). The revenue referred to in Article 22 (1) (c), (f) and (g) (1) and (2) to the taxpayers referred to in Article 2 (3) is a separate tax base for taxation at a specific tax rate (Article 36).
(4) The basis of the tax (partial tax base) of a public company's shareholder is part of the public company's tax base established in accordance with § 23 to 33. This part of the tax base shall be determined in the same proportion as the distributed profit under the social contract, otherwise equal to the work.9b) If, according to § 23 to 33, a public company shows losses, part of that loss is distributed to the shareholder as well as the taxable amount. When determining the taxable amount of a public company's shareholder, the provisions of the first Paragraph 18 (9) shall not be taken into account.
(5) In the case of a taxpayer who is an associate of a limited company, part of the taxable amount is part of the taxable amount or loss of a limited company determined in the same proportion as the profit or loss of a limited company is distributed to that subsidiary in accordance with a separate law. (c)
(6) The revenue referred to in paragraph 1 (d) shall be reduced by social security contributions, the contribution to the State employment policy and the general health insurance premiums paid by a member of a public commercial company or an associate of a limited partnership, provided that such insurance is not paid as a cost of a public commercial company or a limited partnership, but only up to the amount of the premium calculated at the rate without increasing it from the maximum base for such insurance.
(7) Social security contributions, contributions to state employment policy and general health insurance premiums paid by a public commercial company for associates or a limited partnership for associates or associates shall be exempt from tax.
(8) The income of authors for contributions to newspapers, magazines, radio or television from sources in the Czech Republic is a separate tax base for taxation at a special tax rate (§ 36), provided that the income referred to in paragraph 2 (a) is not more than CZK 3,000 in the calendar month.
(9) If the taxpayer does not apply the expenditure evidently incurred to achieve, secure and maintain income, he may apply the expenditure, with the exception referred to in Article 12, amounting to:
(a) 50% of income from agricultural production, forestry and water management, 7)
(b) 30% of the revenue referred to in paragraph 2 (a), with the exception of revenue referred to in paragraph 8;
(c) 25% of business income, other business income under the special rules and income referred to in paragraph 2 (a). (b) and (c),
(d) 25% of income from non-commercial or business activities under the special legislature66) referred to in paragraph 2 (d).
(10) Where the taxpayer applies the expenditure referred to in paragraph 9, the amounts of expenditure shall include all expenses incurred by the payer in the context of the achievement of income from business and other self-employed activities, other than social security contributions and contributions to national employment policy and general health insurance premiums, 21) which the taxpayer may apply in addition to the proven amount, but only up to the amount of premiums calculated at the rate without increasing it from the maximum basis for such insurance under a special rule. 21) In addition, it may, as demonstrated, apply insurance premiums paid by self-employed persons who are not insured in sickness and who are insured for a daily incapacity benefit with a private insurance undertaking only up to the amount of insurance premiums for statutory sickness insurance provided for in specific provisions. 21) The payer who applies the expenditure referred to in paragraph 9 shall always keep records of income and of the accounts of claims arising from business or other self-employed activities.
(11) If the property or movable property is a joint ownership of a spouse who is used for business or other self-employed activity (paragraphs 1 and 2) by one or both spouses, the property or the movable property shall be entered in the property by one of the spouses. Where the property or movable property is held by one of the spouses but is also used by the other of the spouses for business or other self-employed activities (paragraphs 1 and 2), expenditure (costs) relating to such immovable property or movable property which is attributable to a part of the immovable property or movable property used for the business or other self-employed activity of the two spouses may be divided between the two spouses in the proportion in which they use it in their activities under paragraphs 1 and 2. Revenue from the sale of immovable property or movable property in the non-joint ownership of spouses shall be taxed on the part of the spouses who had such property or movable property included in the commercial property. After the completion of the business or other self-employment activity, the procedure laid down in Section 10 (5) of the Act shall be followed.
(12) The revenue referred to in Article 7 (1) (d) shall not be regarded as revenue and shall not be the subject of a tax on the reimbursement of travel expenses paid to members of public commercial companies and to associates of limited liability companies up to the amount laid down in the special regulation. 5)
(13) If the business or other self-employed activity is terminated (interruption) and the taxpayer who keeps the accounts pays the amount of the premiums in accordance with § 23 (3) (a) (5) and § 24 (2) (f) after the specified date, he may submit an additional tax return for tax liability lower. Similarly, the legal successor of the taxpayer with the revenue referred to in Article 7 shall proceed in the event of the death of the taxpayer.
(14) Where a taxpayer with income pursuant to § 7 (1) (a) or (b) applies the marketing year as accounting year, 20) is the partial basis of tax or tax loss the difference between income and expenditure for the completed marketing year. When changing accounting in a calendar year to accounting in a marketing year, the sub-base of tax or tax loss referred to in Section 7 shall be the difference between revenue and expenditure until the last day of the month by which the taxpayer terminates accounting in a calendar year. When a change in accounting for a calendar year is made to accounting for a calendar year, the sub-base or loss referred to in Article 7 (1) (a) or (b) shall be the sum of the difference between revenue and expenditure in the marketing year and the difference between revenue and expenditure from the time when accounting ends in the marketing year to the end of the calendar year. The sub-base shall be included in the tax return for the calendar year in which the marketing year ends or the change from the calendar year to the marketing year and vice versa. Where the taxpayer applies the procedure laid down in paragraphs 9 and 10, § 7a, 12, 13 and 14 or has revenue pursuant to paragraph 1 (c) or (d) or paragraph 2, the method of accounting in a calendar year may not be changed to that of the marketing year. Where a taxpayer applies the procedure laid down in paragraphs 9, 10, § 7a, 12, § 13 or § 14 or has revenue pursuant to paragraph 1 (c), (d) or paragraph 2, it shall change the accounting method in that period to that year. Similarly, the taxpayer shall proceed with the revenue referred to in Article 7 (1) (d) if the public trading company or the limited partnership applies the marketing year as accounting year.
(15) Fees for income referred to in paragraphs 1 and 2 who do not keep accounts and do not apply the expenditure referred to in paragraph 9 shall comply with Paragraph 7b.
§ 7a
Tax fixed at a flat rate
(1) A taxpayer who, in addition to income tax exempt and taxable by a special tax rate, receives income pursuant to Article 7 (1) (a) to (c), including interest on current-account deposits, which, according to the terms of the bank, is intended to carry on the business of a taxpayer [§ 8 (1) (g)], if he is engaged in business activities without employees or cooperating persons, for which the tax administrator may, at the latest by 31 January of the current tax period, set a flat-rate of tax at the request of a taxpayer. In the application, the taxpayer shall indicate the forecast revenue referred to in Article 7 (1) (a) to (c) (hereinafter referred to as "the forecast revenue ') and the projected expenditure on those revenue (hereinafter referred to as" the projected expenditure') and other elements relevant for the determination of the tax by the flat-rate amount referred to in paragraphs 2 to 5.
(2) The flat-rate amount of the tax shall be determined on the basis of the amount of the expected revenue which is subject to the tax, in addition to the income exempt and the income on which the tax is levied at the specific rate of the tax and the amount of the expenditure envisaged, but at least at the rate referred to in Article 7 (9), at the rate of the tax referred to in Article 16 (1). The tax fixed by the lump sum is at least CZK 600 for the tax period. The expected revenue includes revenue from the sale of assets that has been transferred to commercial property, revenue from the cancellation of the reserve created under the Reservation Act 22a) and the expected expenditure includes the remaining price of the assets sold which can be amortised under this Act and the amount of the reserve created for the relevant tax period under the Reserve Act. (22a) The difference between the forecast revenue and the projected expenditure shall be adjusted by the expenditure claimed under Paragraph 24 for which the legal basis for its application has been waived and the expected non-taxable part of the tax base under Section 15. The tax administrator shall fix a flat-rate amount after consulting the taxpayer by 15 May of the current tax period. If the deadline is not complied with, a flat-rate tax may not be fixed for this tax period.
(3) If, during the tax period, the taxpayer achieves income from the sale of a case or right which has been included in the commercial property or other income referred to in § 6, § 7 (1) (d), § 7 (2), § 8 to 10 in aggregate amount in excess of CZK 6 000 for the tax period, in addition to income tax exempt and income from which the tax is levied at a specific rate of tax other than the flat-rate tax, he shall be required to submit, after the tax period has ended, a full tax return and revenue and expenses on the activities referred to in § 7 (1) (a) to (c), to be applied in a return of the amount on which the tax administrator has been levied at the flat-rate, and the flat-rate tax paid. The application of this declaration shall cancel the decision on the flat-rate amount. The tax administrator may set a flat-rate amount for several periods of taxation, but no longer than 3.
(4) The tax administrator may, by decision, abolish the tax fixed in accordance with paragraph 1 for the tax period following the tax period in which it has been found that its amount does not correspond to the income from the activity for which a flat-rate amount has been fixed or the conditions referred to in paragraph 1 applicable to the determination of the tax have been amended.
(5) The tax administrator shall draw up an oral report on the determination of the flat-rate amount. 9e) The Protocol shall also include a decision given at the hearing, which shall include, in particular, the expected amount of revenue, the projected amount of expenditure, the difference between the forecast revenue and the estimated expenditure adjusted in accordance with paragraph 2, the amount of the amounts applied pursuant to Paragraph 15, the amount of tax and the tax period to which it relates. If the taxpayer agrees to the tax so determined, no appeal may be made against the decision declared; in the event of disagreement, the tax will not be fixed by a lump sum. The tax thus determined shall no longer be measured by payment. The taxpayer shall keep a simple record of the amount of income achieved, the amount of claims and the tangible assets used for the pursuit of the activity.
(6) The tax fixed by the flat-rate amount shall be payable no later than 31 May of the current tax period.
§ 7b
Tax records
(1) Tax records provide for the determination of the income tax base and contain data on:
(a) revenue and expenditure, broken down as necessary for the determination of the taxable base;
(b) assets and liabilities.
(2) (h) unless otherwise specified below.
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Regulation Information

CitationFull text of Act No. 90 / 2004 Coll., Act No. 586 / 1992 Coll., on Income Tax, as resulting from subsequent amendments
Regulation Type-
Author-
CollectionCode of Laws
Date of Promulgation27.02.2004
Effective from-
Effective until-
Status Valid
The regulation text is for informational purposes only.

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