As the new coalition government prepares its own version of the 2026 state budget, several tax changes have already been outlined in the coalition agreement. Many of these measures will affect individuals, including employees, families, and freelancers.
Here’s a brief overview of the key tax-related proposals you should be aware of as a taxpayer in Czechia.
Return of Previous Tax Deductions
Several tax reliefs that had been reduced or removed in recent years are now expected to return:
Kindergarten allowance (school fee deduction for children in preschool)
Spouse deduction — to be expanded again without limitations based on the child’s age
Refundable tax credit — in cases where individuals don’t earn enough to use the full allowance, unused parts may be refunded
Tax-free tips — tips in restaurants may become fully exempt from income tax
These changes are expected to benefit families and low-income earners, but could also reduce public revenue.
Slower Growth of Social Security Contributions for Self-Employed
Under the previous government, minimum contributions to social security for self-employed persons (OSVČ) were set to rise significantly. The new coalition is planning to slow down or stop this increase, which may be welcome news for freelancers and small business owners.
However, lower contributions may lead to lower pension entitlements in the future — something to consider for long-term planning.
Lower Corporate Taxes and Broader Deductions
Although this mostly applies to companies, individuals running businesses through s.r.o. structures or freelancing may benefit indirectly from:
A proposed corporate income tax cut from 21% to 19%
Faster depreciation of capital investments, making it easier to deduct costs of equipment or machinery
These steps are intended to encourage investment and business growth.
Unclear Fiscal Impact
Analyses suggest that while these measures aim to support households and businesses, they could lead to reduced state revenue — possibly by CZK 40–60 billion per year. At the same time, some proposals aim to balance the budget by:
Reintroducing electronic sales registration
Improving tax collection from multinational companies
But whether these will offset the cost of new tax breaks remains to be seen.
What Does It Mean for You?
While many of these proposals are still in early stages, they could directly affect your tax filing, pension planning, and household budgeting in the coming years.
We’ll continue monitoring updates and provide more detailed guidance as the proposals turn into legislation.