Tax Newsletter - Archive
Forvis Mazars Tax View - archive of tax articles
Payment for early termination of the contract by the customer from the VAT point of view
In this article we would like to draw your attention to a recent decision of the Court of Justice of the European Union (hereafter the ‘CJEU’) in case C-622/23 rhtb (hereafter ‘the Decision’), which dealt with the issue of the VAT treatment of payment for early termination of a contract by the client. At issue was whether the payment was subject to VAT or whether it was compensation for damages not subject to VAT.
GFD information on changes in the field of VAT from 1 January 2025
Employee Share Plans Taxation – Optional Tax Regime on the Horizon
This year has brought significant changes in the taxation of employee share and option plans (hereinafter "ESOP"). The new rules effective from January 2024 (more in our article HERE) have caused numerous complications in practice. However, better times are ahead - on 24 October 2024, a parliamentary amendment was introduced as part of the amendment to the Act on the Provision of Childcare Services in Children's Groups, which aims to significantly simplify the situation.
Increased Tax Deduction Limit For Donations Extended Until 2026
The increased limit for tax deductions on donations, originally introduced as a temporary arrangement, will remain in effect until 2026. The proposal currently in the Chamber of Deputies maintains the maximum limit for deduction of donations at 30% of the tax base.
Legislative Changes in Agreements and Employee Benefits from 2025
An amendment proposal was published at the end of October, introducing the third version of changes in taxation and insurance premium contributions for income from Agreements on Work Performance (hereinafter "AWP") effective from 1 January 1 2025. These changes respond to data collected from the mandatory AWP records at the Czech Social Security Administration (hereinafter "CSSA") since July 2024, which showed that the originally approved amendment to Act No. 163/2024 Coll. and its concept of so-called reported agreements would not bring the expected results. Moreover, it would have meant a significant administrative burden for both employers and social security administration.
Income Tax Report – A New Obligation for Accounting Entities and Its Impact
As part of the amendment to the Accounting Act, effective from 1 January 2024, a new obligation has been implemented into Czech legislation for selected entities to prepare and make accessible a report containing information on income tax amounts and related economic information about individual companies within a group, referred to as the Income Tax Report (hereinafter the “Report”). This obligation applies to large accounting units and consolidating entities that meet certain turnover thresholds, provided a cross-border element is also present. The amendment transposes the Directive (EU) 2021/2101 of the European Parliament and Council on public country-by-country reporting (PCbCR), aiming to enhance transparency of tax information for multinational corporations.
Amendment to the European VAT Directive - ViDA alias VAT in the Digital Age
In early November 2024, the Economic and Financial Affairs Council (ECOFIN) approved a proposal for an amendment to the European VAT Directive, which should bring a significant extension of electronic invoicing and introduce so-called digital reporting, i.e. the real-time transmission of issued VAT invoices electronically to the Tax Authority. Significant changes are also expected in short-term accommodation and passenger transport platforms. The package of changes, known as ViDA (VAT in the Digital Age), should be gradually implemented by EU Member States, with the first changes to be reflected in Member States' national legislations as of 2028. The proposed changes, consisting of three pillars, should affect almost all VAT payers established in the EU.
Amendment to the VAT Act 2025 – Part II.
Change in the Process for Reporting Posted Workers to the Czech Labour Office
A requirement for EU companies to report the posting of foreign employees to the Czech Republic in the context of the transnational provision of services has existed for many years in the Czech Republic. This reporting is important as it allows the Czech Labour Office to monitor compliance with labor standards, prevent “social dumping“ from countries with lower level of employee labour law rights, and ensure that posted workers receive fair treatment comparable to local workers.
Early retirements and further tightening from October 2024
From October 2024, another change in the area of early pensions, which was introduced by Act No. 270/2023 Coll., amending Act No. 155/1995 Coll., on pension insurance, will enter into force.