In December, we informed you about Parliamentary Print 716, which, among other things, introduced a modification of the relatively new rules for taxation of income derived in the form of employee shares, stocks or options (article). The proposal gives employers the option to choose between taxing this income without deferral and deferring it until one of the taxable moments.

However, during the third reading in the Chamber of Deputies, a transitional provision regarding the “tax treatment” of income from the allocated shares in 2024 was amended. If the employer does not choose to take advantage of the deferral of taxation for shares allocated to employees last year, such income will be deemed to be accounted for in the second calendar month from the date of the entry into force of the Act, pursuant to Section 6(14) and (15) of Act No. 586/1992 Coll., on Income Taxes. Depending on the speed of the rest of the legislative process, taxation of the share or option can therefore be expected in March-April 2025. The adjustment of the transitional provision aligns income taxation with the collection of social security and health insurance premiums.

Companies are therefore unlikely to see the promise of retrospective remediation fulfilled by 2024 and must carefully consider their next steps after the amendment is passed. The proposal is awaiting consideration by the Senate.