The State Secretary for Finance submitted additional amendments to the Tax Plan 2017 No. 34 522 to the lower house of the parliament on 3 November 2016.
The major amendments are summarized below:
Business operating cost
Business expenses acquired for items listed in article 3.15 of the Income Tax Act along with drinks, food, entertainment, congresses, seminars, excursions, conferences and travel for study, are currently deductible only for the portion exceeding 0.4% of taxable wages paid to all employees subject to a minimum amount of EUR 4,500 though, a taxpayer choose for reduction of 73.5% of such expenses. It is planned to increase the percentage deduction from 73.5% to 80% with effect from 1 January 2017 but the increase rate will only affect on entrepreneurs subject to income tax, not to companies.
Rental right
If a rental right constitutes a business asset the related expenses of it are fully exempted but when the rental right is recognized on a residence which is used for private purposes, a percentage of the value has to be added to the taxable income. This percentage differs from 1.05% for a value of up to EUR 12,500 to a maximum of EUR 19,426, plus EUR 2,355 if the value exceeds EUR 1,050,000.
