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.


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  • Addresses depreciation of technical improvements to intangible assets (this was repealed by the 2021 amendment, but the tax administration confirmed that technical improvements to assets that were previously categorised as intangible assets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

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