October 2013

On October 18, 2013 the president signed the Statutory Regulation of the Senate on Amendment of Tax Laws Connected to Rrecodification of Civil Law and the Statutory Regulation of the Senate on Real Estate Acquisition Tax. These new laws shall become effective as of January 1, 2014 and introduce various changes. Hereby we would like to draw your attention to few of these changes:

  • Real Estate Transfer Tax is replaced by Real Estate Acquisition Tax
  • Probate Tax and Gift Tax are to be transferred into the Act on Income Tax which shall result in the incorporation of these transfer taxes into the regulation of the income tax
  • All income of natural person or corporate entities from an inheritance or will shall be tax-free with respect to the income tax
  • All income from a sale of securities within a CZK 100.000 limit which is not a part of business assets shall be tax-free with respect to the natural person income tax
  • With respect to the income tax of natural persons the maximum limit for deduction of gifts for public charity purposes shall increase to 15 %.
  • A new term "public charity taxpayer" is introduced. A public charity taxpayer is a taxpayer whose main activities are non-entrepreneurial activities. Such taxpayer may (with few exceptions) lower his income tax base as much as 30 % (however no more than CZK 1.000.000 in total) if he uses the funds resulting from these savings to cover the costs (expenses) connected to activities the proceeds of which are not taxable, provided he does so not later than within 3 consecutive tax periods.
  • The costs of expert appraisals can be deducted from the tax base of the real estate acquisition tax
  • A seller and a buyer may agree who shall pay the real estate acquisition tax. Although this is possible also today the seller is always a taxpayer and the buyer is a guarantor. In case of failure to pay a tax, the Tax Office enforces the payment primarily from the seller and only failing that the Tax Office turns to the buyer as guarantor. Under the new law the state shall enforce the tax obligation directly from the person who is supposed to pay the tax according to the agreement.