Tax package introduces an increase in the lump-sum expenditure limits

Feb. 19, 2019 Czech Republic

The limits pertaining to the option of exercising lump-sum expenditures for self-emloyed tax payers will once again be increased as of the effectiveness of the tax package, which is expected in the first half of 2019.

The maximum limit for income, on the basis of which maximum expenditures are calculated, shall return to their 2017 level, i.e. from CZK 1 million, valid in 2018, to CZK 2 million, without limiting the possibility of applying a spouse rebate and a tax credit for children, which applied in 2017. This means that self-employed tax payers will now be able to apply the following expenditure levels according to the various professions:

  • it will now be possible to apply lump-sum expenditures up to CZK 1,600,000 in the case of the 80% lump-sum,
  • it will now be possible to apply lump-sum expenditures up to CZK 1,200,000 in the case of the 60% lump-sum
  • it will now be possible to apply lump-sum expenditures up to CZK 800,000 in the case of the 40% lump-sum
  • it will now be possible to apply lump-sum expenditures up to CZK 600,000 in the case of the 30% lump-sum

The increases in the limits for lump-sum expenditures limits will result in also expanding the possibility of applying this instrument to incomes exceeding CZK 1 million, thus reducing the tax burden on this section of entrepreneurs.
Assuming that the tax package comes into effect in 2019, it will be possible, on the basis of a transitional provision of the legislation, to apply the increased lump-sum expenditure limits as part of personal income tax returns filed for the 2019 tax year.

Lucie Berglová
Tax Manager
E lberglova@asbgroup.eu

Renáta Zelinková
Tax Consultant
E rzelinkova@asbgroup.eu