In May 2022, Act No. 128/2022 Coll., on measures in the field of taxation in connection with the armed conflict on the territory of Ukraine caused by the invasion of the troops of the Russian Federation, came into force. This Act deals primarily with the tax regime for donations, or gratuitous benefits, provided by Czech entities and individuals to Ukraine and its residents.
However, this special treatment for donations to Ukraine, which is addressed in more detail in our article from last year, was only temporary. In general, it applied only to gratuitous benefits factually provided in 2022. In this context, there have been many questions as to whether this preferential tax regime for donations to Ukraine will be extended for 2023, as the conflict in Ukraine is still ongoing.
Unfortunately, there has been no legislative change in this matter yet; however, the Ministry of Finance of the Czech Republic has announced on its website that it intends to extend this special legislation. According to the ministry, it plans for the legislative amendment to become part of this year’s tax package, which is currently in the preparation phase prior to the inter-ministerial comment procedure, relying on the government resolution of 11 January 2023.
It is therefore very likely that the special regime for donations to Ukraine will be extended for the following period; however, no specific legislation has been submitted yet. We will continue to keep you informed of developments in this area.