Major tax reforms are reshaping the Czech financial landscape this year, affecting thousands of taxpayers through significant changes introduced by the consolidation package. The reforms include the elimination of student tax benefits, the end of kindergarten allowances, and tighter conditions for spouse-related deductions.
One of the most significant changes involves the lowering of the progressive tax threshold. The 23% tax rate now kicks in at an annual tax base of 1,006,000 CZK, down from the previous 1,935,552 CZK. While this means more people will pay higher taxes, it’s important to note that the progressive rate only applies to the amount exceeding the threshold.
For both entrepreneurs and employees, accurate tax return filing remains crucial. While simpler cases can be handled independently using online forms, those with multiple income sources, particularly from abroad, are advised to seek professional assistance. Tax expert Ziebová points out that property sale income often causes confusion due to complex exemption tests involving 5 and 10-year periods.
The standard filing deadline passed on April 1st, but electronic submissions are accepted until May 2nd. Those working with tax advisors have until July 1st to file their returns.