We have already informed you a few times about the tax package currently under discussion which should affect a large selection of laws which include also Act on Income Tax or Act on Value Added Tax. This amendment was adopted 13^th January 2017 during its third reading in the Chamber of Deputies. The vote adopted an amendment of the budget committee which brings one of the most important changes for entrepreneurs. It lowers the maximum amount for application of flat rate expenses to a half of what it was before. Until now it was possible to apply flat rate expenses up to income of 2 million CZK, the new provision states it will be possible only up to income of 1 million CZK and thus the maximum amounts of flat rate expenses will be as follows:

• 80 % from income from agricultural production, forestry and water management and income from craft industry and entrepreneurial activities, however max. up to 800000 CZK
• 60 % from income from entrepreneurship, however max. up to 600000 CZK
• 30 % from income from rent of property included in company property, however max. up to 300000 CZK
• 40 % from other types of income from self-employed activity, however max. up to 400000 CZK.

Newly, entrepreneurs will be able to make a claim for tax rebate for their spouse and tax advantages on their children.

Even though the Act will probably take effect 1^st April 2017, the effect of lowering of limits for flat rate expenses should be postponed until 1^st January 2018.