The Czech Parliament approved amendments to the Income Taxes Act, the Administration of Taxes Act, and the new Tax Administration Code. The most important news of the new legislation is the following:
Income Taxes. For the taxable period starting in 2009, the possibility of claiming costs amounting to a lump sum of CZK 5 000 has been approved as an alternative to claiming actual costs related to operating motor vehicles. Furthermore it is still possible to claim tax depreciation as a tax-deductible expense, on the condition that the vehicle is used to generate, assure and maintain taxable income.
In case the vehicle is not used solely for business purposes, the lump sum will be decreased to CZK 4 000. For such a vehicle only 80% of tax depreciation can be claimed as a tax-deductible expense. A single taxpayer is entitled to claim expenses as lump sum for a maximum of 3 vehicles.
Administration of Taxes: In contrast to the current situation, according to which the reasons for decisions made during tax proceedings do not have to be given, the amendment implements an obligation for the tax authority to justify its decisions.
A taxpayer’s appeal against tax additionally assessed will have the effect of suspending enforcement. This means that in case a tax payer files an appeal against additional tax assessment, the additionally assessed amount will be due only if this appeal is rejected.
This amendment is a response to a recent judicial decision released by the Constitutional Court and explicitly confirms that it is not allowed to assess a tax liability after the 3 years from the end of the taxable period in which the liability arose have elapsed.
Tax Administration Act. An amendment has been passed by the Chamber which introduces a lump-sum deduction/expense for use of a car for business purposes.