Reporting tax-exempt income

Czech Republic: As of January 2015, a notification duty has been put into place for tax-exempt income in excess of five million CZK

Effective as of 2015, an amendment to the Income Tax Act has introduced a reporting duty for natural persons which is triggered as soon as their tax-exempt income exceeds CZK 5 million (whereas each individual income is to be assessed separately). As a rule, this will concern income derived from the sale of real property, ownership interest or shares in companies, securities, etc. The reporting duty does not extend to income which the tax administration is able to ascertain itself from the available records and which it posts publicly on its bulletin board. The notification must be made within the same time period that applies to the filing of one’s income tax return for the assessment period during which the income was attained. The new notification duty will only apply to income gained after the amendment came into force, i.e., from 1 January 2015 onwards. The penalty for non-compliance with the duty may amount to up to 15% of the unreported income. The notification of tax-exempt income is not tied to any prescribed pre-printed form.

Source: Income Tax Act (Act No. 586/1992 Coll.)

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