Full text of Act No. 99 / 2001 Coll.

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

Valid Declared full text
Text versions: 19.03.2001
Contents
§ 1 ČÁST PRVNÍ § 2 § 3 § 4 § 5 § 6 § 7 § 7a § 8 § 9 § 10 § 11 § 12 § 13 § 14 § 15 § 16 ČÁST DRUHÁ § 17 § 17a § 18 § 19 § 20 § 20a § 20b § 21 ČÁST TŘETÍ § 22 § 23 § 24 § 25 § 26 § 27 § 28 § 29 § 30 § 31 § 32 § 33 § 33a § 34 § 35 § 35a § 35b § 36 § 37 § 38 § 38a § 38b § 38c § 38d § 38e § 38f ČÁST ČTVRTÁ § 38g § 38ga § 38gb § 38h § 38ch § 38i § 38j § 38k § 38l § 38m § 38n § 38o § 38p § 38r § 38s ČÁST PÁTÁ § 39 § 39a ČÁST ŠESTÁ § 40 § 41 § 42
99
PRESIDENT OF THE GOVERNMENT
Announces
full text of Act No. 586 / 1992 Coll.,
on income taxes,
Act No. 2000 / 2000 Coll., Act No. 100 / 2000 Coll., Act No. 100 / 2000 Coll., Act No. 100 / 2000 Coll., Act No. 100 / 2000 Coll., Act No. 33 / 1993 Coll., Act No. 42 / 1994 Coll., Act No. 63 / 1999 Coll., Act No. 114 / 1994 Coll., Act No. 98 / 1994 Coll., Act No. 32 / 1995 Coll., Act No. 149 / 1995 Coll., Act No. 54 / 1997 Coll., Act No. 130 / 1997 Coll., Act No. 210 / 1997 Coll., Act No. 227 / 1997 Coll., Act No. 104.
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, with the exception of the creditor's income on the loan or loan returned, which he has acquired by paying the debt arising from that loan or loan at an amount equal to the difference between the value of the loan or loan and the price at which the debt was transferred,
(c) income from the extension or narrowing of the joint capital of spouses. (1b)
§ 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. 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. Furthermore, the exemption does not apply to revenue accruing to the taxpayer from the future sale of a family home, apartment, including a share in the common parts of the house or co-ownership, 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 joint ownership, 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. Furthermore, 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, made 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 of the assets,
(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 installations, installations for other ways of producing electricity or heat from biomass, 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 to be cases where the installation has been reconstructed if the revenue from the operation of such equipment has 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 from the competition, from the advertising competition, from the advertising composition and the price from the sports competition with a value not exceeding 10 000 CZK, except for the price from the sports competition for taxpayers where the sport activity is a business (§ 10 (8)). However, the tender price and a similar price from abroad shall be exempt entirely if it has been donated in full by the beneficiary for the purposes set out in Sections 15 (8) and 20 (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 and from public higher education funds 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 benefits, 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 payments received in compensation for loss of income and payments having the character of income under § 6 to 9;
(l) benefits from the insurance of persons, other than those from the insurance of a certain age exceeding the principal,
(m) performance provided by the armed forces to soldiers of basic (replacement) service, pupils of non-active schools and soldiers in reserve called for exercises under special regulations, 3)
(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 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 cities, municipalities, higher local authorities, state funds, grants awarded or contributions from the state budget granted under special legislation69) to the acquisition of tangible capital assets, 20) to its technical evaluation, with the exception of subsidies and contributions charged to income (income) 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; income from the sale of other securities or income from the return of employees' shares, if the period between the acquisition and transfer of such securities on sale or repayment exceeds 6 months, and income from the holding on cancellation of the holding fund 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 changing the legal form 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 six months or five years between the acquisition and transfer of securities with the same taxpayer shall not be interrupted,
(x) revenue resulting from the write-off of compensation obligations made under special bankruptcy and settlement legislation, 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 an enterprise or other self-employed 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 200,
(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 by the Constitutional Court found published under No 3 / 2000 Coll.,
(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) revenue arising from a European Community grant granted under a specific legislation, 4f)
(zi) the income of a shareholder not participating in a profit transfer contract resulting from the compensation under a profit transfer contract under Section 190a of the Commercial Code ("profit transfer contract") or in a control contract under Section 190b of the Commercial Code ("control contract"), reduced by the amount subject to the special tax rate under Section 36 (1) (b) (4) and (2) (a) (11).
(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 the income tax on natural persons, commercial property means the sum of assets (items, claims and other rights, and the money of valued other values) owned by the taxpayer, which have been or is charged. The date on which the property is removed from the property of the payer shall be understood as the date on which the taxpayer last charged the property. 20)
§ 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 the accounts or records of revenue and expenditure, expenditure exceeds the revenue referred to in paragraphs 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 stipulated that the tax is levied at a special tax rate under Section 36 on a separate tax base, except for income for which the tax levied at a special rate is counted on the total tax liability in the tax return (Section 8 (4), Section 36 (6)). 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 has 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 basis for its recovery and that the income is not recorded in the taxpayer's accounts when determining the tax base (sub-tax base) pursuant to § 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 revenue (revenue) or reduced by expenditure (costs) in the tax period in which the legal basis for application has fallen, provided that the refund has not been recorded in the taxpayer's accounts when determining the tax base (sub-tax base) in accordance with paragraphs 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 transition from accounting in the double accounting system to accounting in the simple accounting system shall be treated in accordance with Annex 2, which is an integral part of this Act. The transition from accounting in a simple accounting system to accounting in a double accounting system shall be carried out in accordance with Annex 3, which is an integral part of this Act.
§ 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 as defined in § 38c are, after a reduction under paragraph 13, a separate tax base for taxation at a specific tax rate under § 36 (2) (c), in the case of revenue under paragraph 1 (a) and (d) and under paragraph 10, the aggregate amount of which for the same employer shall not exceed CZK 3 000 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.
(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 employers to employees of the fund of cultural and social needs, 6a) from the social fund, from profit (income) after tax and from employers who have not made a profit, from expenditure (costs) which is not expenditure (costs) to achieve, secure and maintain income, in the form of the possibility of using 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 foreign recreation is provided, including foreign tours, a staff member shall be exempt from the value of non-monetary benefits in aggregate of a maximum amount of CZK 10,000 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 Specific Regulations (21) for social security insurance, the contribution to national employment policy and health 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 generated by the acquisition of employee shares under the special rule (6) below the nominal value, with the exception of income accruing therefrom;
(ch) income from dependent activities carried out on the territory of the Czech Republic resulting from the fees referred to in § 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)),
(i) the value of non-cash donations provided from a fund of cultural and social needs pursuant to 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 profits (income) after tax, for employers who have not made a profit, on account of expenses (costs) which are not expenses (costs) to achieve, secure and maintain income, up to an aggregate amount of CZK 2,000 per year for each employee;
(j) cash performance for equipment and equipment provided to members of the armed forces and corps under special regulations, 6b)
(k) compensation for loss of service income (salary) granted to members of the armed forces and corps under special regulations, 6c)
(l) 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;
(m) wage compensation paid under special rules 6d) equal to the difference between sickness insurance benefits;
(n) income generated by the return of employee shares (bonds) up to the amount of the difference between the nominal value paid and the selling value on issue, provided that the difference was taxed on acquisition before 1 January 1993;
(o) compensation for pension losses granted under the Labour Code for the period before 1 January 1989 and paid after 31 December 1992;
(p) the monetary 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, for employers not covered by this regulation, from the social fund or from the profit (income) after tax, where the repayable loans granted to the employees for housing purposes are up to CZK 100,000 or to bridge the difficult financial situation up to CZK 20,000;
(r) the monetary contribution to the renewal of granted in kind of uniform customs formalities;
(s) a special surcharge granted in foreign currency to members of the armed forces and security corps seconded to UN peacekeeping forces outside the territory of the Czech Republic 6e) for the duration of their activities abroad;
(t) a monetary contribution to the renewal of the granted uniform legal requirements of a member of the fire brigade;
(u) 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 transferred or released for health reasons for occupational risk, occupational disease, accidents at work or diseases arising from or deteriorating from the effects of the working environment;
(v) income up to CZK 10 000 provided by the employer as social assistance to employees directly linked to the bridging of their exceptionally difficult circumstances due to natural disasters, environmental or industrial accidents in the territories in which the emergency situation has been declared, 65) provided that such income is paid from the cultural and social needs fund (2b) 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 and from employers who have not made profits, on account of expenses (costs) which are not incurred (costs) to obtain, secure and maintain income;
(w) employer's contribution to supplementary pension insurance with a State contribution to the account of its employee with a pension fund, 9a) up to a maximum of 5% of the employee's assessment base for social security contributions and a contribution to national employment policy, 21)
(x) in kind and reimbursement of expenses equivalent to the monetary value of in kind provided under the special legislation6g) to representatives of the State and certain state bodies and judges;
(y) the amount of the insurance premiums paid by the employer to the employee for 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 invalidity pension, or, in the case of a full disability 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 agreed by the employee as a policyholder, on condition that the contract provides for the payment of insurance benefits up to 60 calendar months, and at the same time not earlier in the year of the age of 60, but up to a maximum of CZK 12,000 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,
(z) the amounts paid by the employer to cover the expenses associated with the payment of the salary and the deductions from the salary by the employee, the payment of the insurance contribution (additional insurance) to the employee, as well as the amounts incurred by the employer to cover the expenses associated with the provision of the staff member's non-cash benefits.
(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 Paragraph 2 (2), the basis of the tax is 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.
§ 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) the income of an expert, interpreter, intermediary of collective disputes, intermediary of collective and collective agreements under copyright law, arbitrator for activity under special legislation6f) and trustee of bankruptcy for activity under special legislation, 19a)
(d) revenue from the activities of the preliminary bankruptcy special agent of the administrator and the equalisation administrator, which are neither business nor business under special legislation. 66)
(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.
(5) The basis of the tax (sub-base of tax) of the complementary company is part of the tax base of the limited company established pursuant to § 23 to 33 per complementary company. This part of the tax base shall be determined in the same proportion as the part of the profit attributable to the complementary under the social contract, otherwise equally. (c) If, according to § 23 to 33, a limited liability company shows losses, a part of that loss is distributed to the ancillary company in the same way as the tax base.
(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 charging in the double-entry accounting system pays the amounts of the premiums pursuant to § 23 (4) (d) and § 24 (2) (f) after the specified date, he may submit an additional tax return for the 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.
§ 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 only under § 7 (1) (a) to (c) if he is engaged in business activities without employees or cooperating persons, for which the annual amount of such income in the immediately preceding three tax periods does not exceed CZK 1 000 000, is not a participant in an association which is not a legal person or is not a payer of value added tax under a special law, 9d) the tax administrator may, at the request of a taxpayer submitted by 31 January of the current tax year at the latest, fix a flat-rate. 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 applied under Paragraph 24, for which the legal basis for its application has been waived, and by the non-taxable part of the 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 other than those referred to in § 6, § 7 (1) (d), § 7 (2), § 8 to 10 in aggregate amount in excess of CZK 4 000 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 amount when establishing the tax, he is required to submit, after the end of the tax period, a proper tax return and revenue and expenditure on the activities referred to in § 7 (1) (a) to (c) shall be charged in a return on the amount of tax which the tax manager has been levied, and the flat-rate paid shall be counted on the resulting tax. 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.
§ 8
Revenue from capital goods
(1) The revenue from capital goods, in so far as they are not income pursuant to Article 6 (1) or 7 (1) (d), are:
(a) profit shares (dividends) on equity shares in a public limited company, limited liability company and limited liability company, shares in profits from cooperative membership, interest and other income from holdings of securities;
(b) shares in silent partnership profits from participating in business unless they are used to supplement the deposit minus the share of losses up to the original amount;
(c) interest, winnings and other income on deposits in deposit books, interest on funds in the deposit account, except interest and other income on deposits received by the employer from its employees, unless the employer is entitled to receive deposits from the public or from employees under special legislation, 9f)
(d) income from the deposit certificates and the equivalent deposits made to them;
(e) supplementary pension benefits with a State contribution 9a) after the reduction referred to in paragraph 7;
(f) private life insurance benefits following the reduction referred to in paragraph 8;
(g) interest and other income on loans and loans granted, interest on late payments, late payment fee, interest on the right of settlement, interest on current account deposits and interest on the value of the paid-up deposit in the contracted amount of the shareholders of the companies. Interest on current account deposits which are not intended for business under the terms of the Bank (spore accounts, foreign exchange accounts, etc.) shall be assessed in accordance with point (c),
(h) interest and other income on holding notes (e.g. discount on the amount of the note, interest on the amount of the currency).
(2) The participation referred to in paragraph 1 (a) shall, for the purposes of this Act, be understood to mean a monetary and non-monetary contribution to the business.
(3) In addition, income from capital goods shall be considered as income from capital goods:
(a) the difference between the nominal (nominal) value of the bond, including the deposit note or the deposit equivalent, and the issue rate; in the case of early buy-back, the buy-back price shall be used instead of the nominal value;
(b) revenue from the sale of the right to buy in securities.
(4) The income referred to in paragraph 1 (a) to (f) and paragraph 3 (a), and interest income and other income from holding a note issued by the bank to secure a claim arising from the creditor's contribution (paragraph 1 (h)) resulting from resources in the Czech Republic, constitute a separate tax base for taxation at a specific rate (§ 36). If the interest income referred to in paragraph 1 (c) and (d), plus the interest income referred to in paragraph 1 (a) on bonds, 20a, interest income and other income arising from holdings of notes issued by the bank to secure a claim arising from the creditor's contribution [paragraph 1 (h)] and interest income from bonds 20a, as referred to in paragraph 3 (a) referred to in Article 36 (2) (a) (1) and (c) (1) derive from resources in the Czech Republic and the taxpayer referred to in paragraph 2 (2) is included in the commercial property (§ 4 (4)), they shall be deducted from expenditure on the basis of tax (partial tax) and the tax deducted shall be counted on the total tax liability in the tax return (§ 36 (6); This does not apply to defaults for the duration of the bankruptcy.
(5) Where the revenue referred to in points (a) to (f) of paragraph 1 and in paragraph 3 (a) comes from sources abroad, expenditure shall not be reduced by the basis of tax (sub-base of tax) unless the taxpayer makes use of the possibility to include it in a separate tax base, applying the tax rate under Paragraph 16 (2). Income is included in a separate tax base, including tax withheld abroad.
(6) Interest income on bonds issued abroad by a taxpayer established in the Czech Republic or the Czech Republic resulting from the taxpayers referred to in § 2 (2) and the income referred to in paragraph 1 (g) and (h), not reduced by expenditure, shall be the basis of tax (sub-tax base), with the exception of interest and other income from the deposit notes issued by the bank, which are a separate tax base for taxation at a special tax rate (§ 36). The revenue referred to in paragraph 3 (b) shall be reduced by the purchase price of the right to buy. Where the expenditure relating to the revenue referred to in paragraph 3 (b) is higher than the revenue, the difference shall not be taken into account.
(7) The supplementary pension benefit with a State contribution shall be considered as a tax base after a reduction by the contributions paid and the State contributions to the supplementary pension scheme. In the event of a pension, these contributions shall be distributed equally over the defined period of retirement. If the retirement period is not defined, the participant's life expectancy shall be determined according to the death tables of the Czech Statistical Office at the time when the pension begins for the first time. One-off compensation or compensation shall not be reduced by contributions paid by the employer to the pension fund for employees after 1 January 2000 to determine the taxable amount.
(8) The performance of private life insurance shall be considered as the basis of the tax after the reduction of the premiums paid. For transactions in the form of an agreed pension, the basis of the insurance performance tax shall be taken to be less the premiums paid, equally divided into periods of retirement. If the retirement period is not defined, the life expectancy of the participant shall be determined as the median life expectancy according to the Death Tables of the Czech Statistical Office at the time when the pension begins to receive for the first time. The compensation shall not be reduced by contributions paid by the employer for employees after 1 January 2001 to determine the taxable amount.
(9) If the income referred to in paragraph 1 or paragraph 3 is involved in the joint capital of the spouses from a source incorporated into the assets of one of the spouses, it shall be taxed only on that spouse.
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Regulation Information

CitationFull text of Act No. 99 / 2001 Coll., Act No. 586 / 1992 Coll., on Income Tax, as resulting from subsequent amendments
Regulation TypeDeclared full text
Author-
CollectionCode of Laws
Date of Promulgation19.03.2001
Effective from-
Effective until-
Status Valid
Legal Areas: Taxes Finance Administrative law
The regulation text is for informational purposes only.

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