Recently, Finance Ministry has published the first draft copy of the amendment to the Income Tax Act for comments. These amendments are supposed to be started from year 2019.
The proposed personal income tax rate of 19% is 1.1% less than the present tax burden. The Ministry of Finance also proposes to eliminate the solidarity tax increase, which is mentioned in section 16a of the income tax act (ITA).
A Czech entity would have to incorporate in its tax base an amount of specific income of its Controlled Foreign Company (CFC), i.e., a company that also include Czech company as a partner and in that place the direct or indirect participation of that Czech company is more than 50% of the capital.
There is also made a proposal of hybrid mismatches. According to that proposal, the extra tax on hybrid mismatches would be applicable for related entities as of year 2020.
Another proposal is to include general anti-abuse rule (GAAR). For this purpose, the tax procedure code would be reviewed.
