News in Accounting
Changes valid from 2014:
Once again, there are certain changes to the minimum health and social insurance deposits for self-employed individuals. The new health insurance deposit is CZK 1,752 (CZK 1,748 in 2013) and the social and pension insurance deposit is CZK 1,890 (the same as in 2013) with effect from 1 January 2014.
The adoption of the Civil Code and the Business Corporations Act has introduced a number of changes and novelties. Some of them include, for example:
Guarantee for VAT not paid by the recipient of the taxable fulfilment will be limited only in relation to payments exceeding the amount of CZK 700,000 due to the remittance of such payment to a non-disclosed account.
Changes in compensatory wage payment – As of 1 January 2014, the due date for the payment of compensatory wages is reinstated to 14 days.
Taxation of profit paid out to partners of business companies – With effect from 1 January 2014, profit generated by a business company will be fully exempt from profit tax as of this date. The earnings achieved by companies in the past and not paid out to partners are still subject to taxation.
GRATUITOUS BAILMENT, LOAN FOR USE, LOAN FOR CONSUMPTION - These completely new terms, to which we will need to get accustomed to, are introduced by the new Civil Code effective from 1 January 2014.
- GRATUITOUS BAILMENT – It is an institute where a lender lends a thing for use by a bailee free of any charge and without agreeing on the period or the purpose, for which the thing is to be used. The lender may demand the return of such thing at any time.
- LOAN FOR USE – Contrary to gratuitous bailment, the period of temporary use and/or the purpose, which clearly implies the period of temporary use, are explicitly agreed in the case of a loan for use. The lender may not demand the premature return of the thing unless the lender learns that the borrower is using the thing in conflict with the agreement.
- LOAN FOR CONSUMPTION (formerly loan) – It is the new term for the previously used term "loan". An agreement on a loan for consumption is concluded when the lender lends a fungible (e.g. money) to the borrower for use at the discretion of the borrower who is to return a thing of the same kind after some time. If the agreement does not specify the date, on which the borrowed thing is to be returned, the maturity thereof is dependant on the termination of the agreement.
The Czech term PODNIK is replaced by the term ZÁVOD. Both terms, however, are translated as ENTERPRISE into English.
Termination of agreements on work carried out outside regular employment – The termination of such agreements will not be effective unless executed in writing. Such agreements include, for example, agreements to complete a job or agreements to perform work.
Last update on 09/06/2014.