Act on Uniform Monthly Employer Reporting 

The government describes the draft of this act as a tool to reduce the administrative burden on employers. Instead of filling  dozens of different forms for different institutions, employers will file only one monthly report. The proposal also assumes that in the coming years, the withholding tax on income from employment income will be abolished and, along with the other changes in the payroll agenda The act is scheduled to come into effect on January 1, 2026. 

Given the potentially high chances of this bill being approved, other amendments were submitted by government deputies during yesterday’s second reading in the Chamber of Deputies:  

Abolition of the CZK 40 million limit for tax exemption on income from the sale of securities, business shares, and crypto assets  

• If the proposal is approved, individuals would be able to exempt these types of income without any value limitation if the specified conditions are met (other conditions for tax exemption stayed unchanged). 

• The proposed effective date is January 1, 2026. 

Specific regime for so-called qualified employee options 

• It is a taxation system that complements the current options for taxing employee share plans and is optional for employers. 

• The advantage of this regime lies in the fact that if the statutory conditions are met, the determined income from the exercise of the qualified employee option would be taxed as other income and not as employee income, thus eliminating the obligation to pay mandatory social security and health insurance contributions. 

• This regulation contains many specific rules and is proposed to take effect on January 1, 2026. 

Changes in the application of the for research and development deduction 

• It is proposed to adjust the amount of the deduction to 150% of the expenditure spent on research and development, provided that it does not exceed CZK 50 million. If the expenses exceed this limit, they will be supported by a 100% deduction. The CZK 50 million threshold is monitored per so-called deduction unit. 

• It will also newly be possible to claim the deduction in the period in which the entitlement arises and in the following five periods (currently, it is limited to three periods). 

• The new rules should apply from January 1, 2026, and will apply only to newly claimed deductions. 

Increase in the value of an “low-value” receivable, for which a 100% statutory provision can be created on a one-off basis, from CZK 30,000 to CZK 50,000. 

Top-up Tax Act 

Another expected amendment is an amendment to the Top-up Tax Act. This amendment also passed the second reading on May 29, which brought it closer to its approval, which until recently seemed relatively uncertain. The amendment contains many key amendments to the current law, but the most significant for practice is the extension of the deadlines for filing a tax return and information report on the Czech top-up tax. According to the currently valid wording, the taxpayer of the Czech top-up tax is obliged to file a tax return for the Czech top-up tax and the related information overview no later than 10 months after the end of the tax period. The amendment under discussion should extend the deadlines as follows: 

• filing a tax return for the Czech top-up tax no later than 22 months after the end of the taxable period, and   

• Submission of the information report on the Czech top-up tax within 15 months after the end of the taxable period, or within 18 months if it is the group’s transition year. 

The key will be the vote in the third reading of the Chamber of Deputies, where it will be decided which laws and which amendments will apply in the coming years. We will monitor this process and keep you updated in our blog articles  and webcasts.