The tax package 2021 which significantly alters the area of personal income taxation has been approved (again) by the Chamber of Deputies. The bill now goes to the President who has previously announced that he will neither veto nor sign the amendments. As such it is still unclear whether the amendments will have general effect already from 1 January 2021.
These are the most important personal income tax changes and their possible effectiveness:
- Abolition of the super-gross wage and establishment of new income tax rates of 15% and 23% – effective for the entire period 2021 (technically, due to later effectiveness, the taxpayer can choose for 2021 between the current and the new state)
- Increase of the basic taxpayer tax deduction (currently CZK 24,840 p.a.). The amount of the discount is set at CZK 27,840 for 2021 (effective for the whole period 2021) and at CZK 30,840 for 2022.
- Monetary meal allowance provided by employers with a beneficial tax regime – an alternative to meal vouchers – effective from 1 February 2021, if the law is promulgated in January
- Depreciation (abolition of depreciation of intangible assets, increase of the limit for mandatory depreciation from CZK 40 to 80 thousand and introduction of extraordinary accelerated depreciation of tangible assets acquired in 2020 and 2021) – effective for the periods 2020 and 2021
For most taxpayers these are for sure profitable changes. In case of individuals who have high income for instance from rent or sale of shares, it may be advisable to review which regime for 2021 they should choose.