You probably have not missed the current debate on the final form of the tax recovery package, which was intensively discussed by the government together with representatives of trade unions and employers. A much-discussed topic is the fight over employee benefits, for which the government had proposed to cancel the tax-credit regime. However, after strong pressure from representatives of employers and trade unions, Prime Minister Petr Fiala announced on 24 August 2023 that the government coalition had decided to maintain the tax advantage of employee benefits, but with the limit of half of the average wage in the previous period (approximately CZK 20,000/year). Therefore, if you provide your employees with benefits in excess of CZK 20,000 per calendar year, you will have to deal not only with employment income tax but also with social security and health insurance contributions.

The Chamber of Deputies will discuss the final form of the recovery package at its meeting in September. We are constantly monitoring the current events relating to the tax recovery package and will inform you of any further changes as soon as possible.

Author: Marek Toráč, Vladimír Toráč