Taxes

Obligation to submit a tax return 

Act No. 366/2022 Coll., through which changes are made to the Income Tax Act (ITA), was published in the Collection of Laws on 2.12.2022. Effective from 1.1.2023, the limits of taxable income decisive for the obligation to file a personal income tax return have changed:

- pursuant to Section 38g (1) of the ITA, the limit is increased to CZK 50 000 (until now this limit was set at CZK 15 000)

- pursuant to Section 38g (2) of the ITA, the limit is increasing for taxpayers with income from dependent activities, who have additional income according to Sections 7 to 10 of the ITA to CZK 20 000 (until now this limit was CZK 6 000).

Increased limit for exemption of pensions from taxation 

Regularly paid pensions are exempt from income tax if the annual amount does not exceed 36 times the minimum wage. In 2022, the limit was CZK 583 200, while for 2023, the limit is CZK 622 800. 

Discount for suspended distraint 

Effective from 1.1.2022, a new discount was introduced to the Income Tax Act (ITA) for the suspended distraint (Section 35 (4) of the ITA), based on the amendment of the Execution Code No. 286/2021 Coll. 

According to this provision, “the taxpayer’s tax calculated for the tax period or the period for which the tax return is filed is reduced by the discount for the suspended distraint, the amount of which corresponds to the amount of the compensation which the bailiff awards to the authorised party in the tax period or the period for which the tax return is filed, when the distraint is suspended, the subject of which was a claim not exceeding CZK 1500 without accessories, and which took place for at least three years before Act No. 286/2021 Coll. entered into force, for the reason that in these three years this claim was not recovered even in part.” 

This discount can therefore be applied for the first time for the 2022 tax period either in the tax return or in the annual tax settlement with the employer.