Intangible assets. A decree on accounting, which entered into force at the beginning of the year, contains an exhaustive list of items that cannot be considered intangible assets. Until the end of 2007, the decree contained only a definition of what an intangible asset is and, at the same time, stipulated certain criteria for defining intangible assets.
The new wording specifies what items are not to be considered intangible assets: expert opinions, market researches, development plans, proposals for promotional and advertising events, quality system certifications, and software for operating technology or for equipment that cannot function without this software. Furthermore it is exclusively left to the accounting unit to decide to enter some items such as technical and energy audits or forestry management plans into the books as intangible assets or costs.
Tax allowance for tax non-residents. According to the rules of the Income Taxes Act effective as of 1 January 2008, tax residents in the Czech Republic have the right to claim a tax allowance of CZK 24 840 per annum if 90% of their worldwide income is subject to taxation in the Czech Republic.
Since it is practically impossible to prove the fulfilment of the conditions for tax residency in 2008 at the beginning of the year, foreigners working in the Czech Republic under the same conditions as Czech citizens thus receive a lower net monthly salary.
The Ministry of Finance has resolved this problem with an amendment to the Income Taxes Act allowing both tax residents and tax non-residents in the Czech Republic to claim the tax allowance without any restriction. This amendment should become effective on 1 July 2008 and allow tax residents to apply the tax allowance for the first time on their August salary when making tax advance payments.
Until it becomes effective, the Ministry of Finance issued a measure in February 2008 according to which it is possible for tax residents to apply the tax allowance of CZK 2 070 even without assessing the amount of their worldwide income. When offsetting salaries at the end of 2008, the legislation then valid will be applied. The Ministry of Finance wants the above amendment to be effective by then and tax non-residents should therefore be entitled by law to apply the tax allowance for each month of 2008.