The years 2014 and 2015 are the years of clear changes in tax relief. Not only have the amounts of discounts known so far changed, but also their catalog and the scope of their settlement have expanded. For your orientation we present the full catalog of discounts.
Credits that reduce the tax base
Credits that reduce the tax base are also known as tax-exempt amounts. Contrary to Poland, instead of one free amount, the amount of which has recently been questioned by the Polish Constitutional Court, the Income Tax Act lists several of them.
1. Donations and blood donations
Donations in the form of money orders or material donation given to foundations or associations, churches and religious associations, but also to the Police, Fire Brigade or political parties lower the tax base. Commercial companies are also entitled to deduct donations.
As a donation, you can also deduct the purchase of health funds for people with disabilities over the funding they receive from insurance funds.
It is a condition for the deduction that the total amount of the donation for one person is equal to or higher than 1000 crowns.
A donation worth CZK 2000 is considered to be a donation of blood. In the case of donating organs for transplant from a living person, the tax value of the donation is 20,000 kronor.
2. Interest relief on a flat or house
The taxpayer may deduct the value of interest on a home or mortgage loan from the tax base. The only condition is that the house or flat is in the territory of the European Union.
3. Relief for old-age or life insurance
It allows you to deduct up to 12,000 kronor of pension insurance contributions in a private fund pension or life policy up to 24,000 kronor. Contributions paid in foreign funds are also deductible, provided that the conditions for payment of funds are similar to the Czech regulations.
4. Contributions to employee organizations and trade unions.
5. Vocational and qualification
The costs of exams confirming obtaining additional education or certificates of professional competence can be deducted from the tax base.
6. Discounts for research
7. Discounts for support for students
In addition to tax deductions deducted from the tax base (known as tax-exempt amounts), you can deduct different amounts depending on your personal situation.
1. Basic relief
Basic relief of CZK 24840 can be deducted by any taxpayer who has a source of income from business activity in the territory of the Czech Republic, death redundancies, civil law contracts and rental.
2. Relief for a non-working spouse
If in a given tax year the spouse did not have taxable income, i.e. from which he could deduct the basic relief himself, his relief in the same amount may be deducted by the other from the spouses who bear the entire financial burden of maintaining the household.
The spouse relief is not available to persons who use the flat-rate method in their business activities.
3. Relief for a disabled person
This relief applies to both the taxpayer and the spouse and ranges from CZK 2,520 to 16140 depending on the degree of disability.
4. Student allowance
Persons running a business who study at the same time and are under 26 years of age may additionally deduct 4020 crowns from the tax. The age limit is increased to the age of 28 in the case of doctoral studies.
5. Pre-school allowance.
The taxpayer who sends the child to a nursery or school may deduct the related (tuition) costs from the tax. but not more than CZK 9,200 per year.
6. Child tax credit
Child tax credit may also be deducted from the tax due. Its amount depends on the number of children and is:
- CZK 13404 for the first child,
- CZK 15804 for the second child,
- CZK 17004 for each subsequent child,
- twice amounts for each child who has a severe disability
Severe disability includes, inter alia:
- loss of limbs (including partial) or their severe dysfunction
- serious diseases of the spine and skeleton,
- other chronic problems limiting mobility, including cardiovascular diseases,
- complete or almost complete loss of hearing or vision,
- diseases of neurological or psychiatric origin which limit IQ below 50 or significantly prevent communication or orientation (e.g. autism, alzheimer's disease)
people who use the flat-rate cost method in their business activities.
Relief for employers
Employers who decide to pay an employee a bonus in the form of a subsidy to his investment in pension funds may include the entire bonus in costs activities. The bonus paid in this way is not included in the basis of tax advance and employee insurance premiums. If the employer dismisses the employee or resigns from this form of paying the bonus, he does not lose the current deductions.
Food vouchers are also partially free of contributions and tax.
Employers are also entitled to additional allowances for employing people with severe disabilities.