From the first of January 2022, the Ministry of Finance has approved changes in the tax field for the various taxpayers, following we describe the planned innovations:
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Increase in tax deduction per taxpayer.
From the first January 2022, the tax deduction due to each taxpayer will increase, in fact, currently, every taxpayer is entitled to a deduction of 27,840 CZK per year which in 2022 will reach 30,840 CZK per year.
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Abolition of the maximum amount of the monthly tax bonus.
Under Czech law, every natural person resident in the country is entitled to a tax credit for each dependent child. Currently, the legislation provides a tax credit of CZK 15,204 for the first child, CZK 22,320 for the second, and CZK 27,840 for the third and subsequent dependent children. In the event that the total taxes to be paid are higher than the tax credit for dependent children, the taxpayer will receive a special tax bonus corresponding to the difference between the family allowances and the tax debt. The novelty for 2022 is represented by the abolition of the roof ceiling of this special tax bonus, which was previously set for CZK 60,300 per year.
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New flat-rate fee for individual traders (OSVČ) from the new year.
Every year the flat-rate tax that individual traders have to pay is adjusted, this adjustment is implemented to adjust the health and social insurance according to the average salary. In 2022 the amount of the monthly advance payment for the flat-rate tax is set at 5,994 CZK. This amount includes the minimum advance payment of health insurance in the amount of CZK 2,627, the minimum social insurance advance payment increased by 15% in the amount of CZK 3,267, and the advance payment of income tax in the amount of CZK 100.
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Extension of the range of income exempt incomes.
Czech legislation provides for various tax-free incomes, below we highlight the changes for 2022:
- The exemption for taxpayers for income received from bonds issued abroad remains;
- There is a tax exemption on contributions paid by the state to injured persons in violation of the law;
- There is a tax exemption on contributions paid to persons injured by the extraordinary event at the site of the Vlachovice-Vrbětice ammunition depot.
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New tax discount for uneased foreclosures.
The amendment to the Enforcement Code states that if the legal conditions are met, the executor will stop enforcement if the claim does not exceed CZK 1,500 and its recovery has been ongoing for at least three years before the amendment comes into force. If the claim has not been recovered even partially after three years, a tax deduction is allowed in favor of the creditor for the interrupted enforcement. The amount of the tax refund will correspond to the amount of compensation granted to the creditor by the bailiff at the time of termination of enforcement.
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International tax relations.
From 2022a new tax treaty will be signed with Bangladesh, which provides for the taxation and elimination of international double taxation of all possible types of income.
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Amendment of the rules on the valuation of goods.
The amendment of the rules on valuation estimates consists mainly in linking the estimates to the average market value of the real estate on an annual basis, and no longer only to the state of the asset itself. In this way, the aim is to bring the estimate closer to the established and negotiated price of immovable property to its real value. The new regulation will give citizens greater certainty in the correctness of the estimated prices and, in some cases, will allow savings on appraisals.
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Changes to the regulation of water and sewage tariffs.
The Ministry of Finance has published a new decree on price regulation in the water supply and sewerage sector for the period 2022-2026 with effect from 1 January 2022. After reducing VAT on water and sewage tariffs from 15% to 10% last year, the authority continues its active approach to price regulation in the water sector. In this assessment, new rules are established to ensure that the consumer pays only what is necessary. The main change in evaluation is the introduction of the so-called equalization so as to avoid discrimination for the consumer. In fact, in the event that there will be an annual consumption lower than that agreed with the regulatory body, the water company will return these funds to consumers in the form of a lower price in subsequent years.
Source: http://www.camic.cz
