The Ministry of Finance has published a draft amendment to the Income Tax Act, which responds to the draft of the new Accounting Act. This legislative proposal aims to modernize and simplify the tax system and better adapt it to current economic conditions. The proposed legal effect is as of January 1, 2025; during the legislative process, some provisions of the draft may of course be changed and the force of legislation itself may be deferred.

Some of the key changes introduced by the amendment are summarized below.

• Tax depreciation – it is proposed to abolish depreciation categories and increase the entry price limit for tax depreciation to CZK 100,000. Three depreciation periods are newly proposed – 60 months for movable assets and immovable assets up to CZK 2,000,000, 360 months for other immovable assets, and 180 months for goodwill. Depreciation will be applied monthly; the straight-line and accelerated depreciation methods will be abolished.
• Use of IFRS – international accounting standards will be able to be used as a basis for determining the tax base, adjusted for differences compared to Czech accounting system. When switching to IFRS, the differences in the tax value of assets and liabilities are taken into account within 10 years.
• Taxation period – it will now be linked strictly to the accounting period, which can also be defined according to calendar weeks.
• Accounting in euros – taxpayers keeping accounts in euros will be able to state and pay tax in euros without conversion to crowns. For other foreign currencies, the conversion obligation will remain.

We monitor the changes for you; we will inform you about further progress in time.