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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.
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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