Czech Republic: Tax administration’s position regarding changes to tax depreciation

Czech Republic: Tax administration’s position

The tax administration announced its position regarding changes to the tax depreciation rules that were added to the tax law in January 2021.

1000

Related content

Among the changes (that have a retroactive effective date) are rules regarding extraordinary tax depreciation, adjusted limits for acquisition costs of tangible fixed assets, and the cancellation of the intangible asset category.

The tax administration provided guidance on its website that:

  • Explains the option to use a new CZK 80,000 limit (increased from the original CZK 40,000 limit) for the acquisition cost of assets acquired in 2020.
  • Addresses depreciation of technical improvements to intangible assets (this was repealed by the 2021 amendment, but the tax administration confirmed that technical improvements to assets that were previously categorised as intangible assets continue to be depreciated as before)
  • Confirms the treatment of “extraordinary depreciation” that may temporarily be applied for assets falling into the first and second depreciation group in the period from 1 January 2020 to 31 December 2021
  • Provides regarding a finance lease contract’s minimum duration period, the length of the depreciation period is derived under the conditions pertaining to extraordinary depreciation
  • Allows taxpayers to combine application of the rules before and after the amendment

Read a March 2021 report prepared by the KPMG member firm in the Czech Republic

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal