The tax package has been approved in a wording reflecting several amending motions. Some of the approved changes in income taxation include:

• Change in research and development tax relief;
• Increase in the expense charge-off flat rate for sole traders (OSVČ);
• The possibility of reflecting IFRS impacts already in the 2019 taxation period (financial institutions); and
• Change in the withholding tax limit to an amount relevant for health insurance payments.

As part of the tax package, a technical amendment to the VAT Act, including a series of amending motions, has been approved. If no additional changes are made to the wording of the amendment in the follow-up legislation process, the key changes in the VAT Act are expected to affect the following areas:

• Guidance on taxing vouchers (single-purpose and multi-purpose vouchers);
• New provisions on the date of taxable supply (ancillary supplies to leases, long-term supplies);
• Rules for delivering tax documents;
• Finance lease definition (effective from 2020);
• Lease of real estate and taxation option restriction (effective from 2021);
• Guidance on VAT deduction in respect of real estate repairs;
• VAT deduction claim upon registration;
• Determination of the place of supply on electronically-provided services; and
• Decrease in the VAT rate upon heat delivery.

The tax package is to be subsequently voted on in the Senate and signed off by President. The general effectiveness of these changes (with the exceptions noted above) will occur on the first day of the month following the month in which the amendment is published in the Collection of Laws (unless specifically stipulated otherwise).

We keep monitoring the further development.

The article is part of dReport – January 2019, Tax news; Grants and investment Incentives.