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Payroll Newsletter - Spring 2023
Tax changes, news, practical information
An overview of the news from the payroll environment in one place. This is our quarterly payroll newsletter. Scroll through the current release.
Travel reimbursements – update on average electricity prices
As of 1 April 2023, the Regulation on the Change of the Rate of Basic Reimbursement for the Use of Road Motor Vehicles and Meals and on the Determination of the Average Price of Fuel for the Purpose of Providing Travel Reimbursements for 2023 is amended. The basic reimbursement rate for road motor vehicles is increased from the current CZK 6 to CZK 8.20 per 1 kilowatt-hour of electricity.
New reporting obligation to CSSA from 1 April 2023
In connection with the military conflict in Ukraine caused by the invasion of the Russian Federation, a new reporting obligation to the Czech Social Security Administration (CSSA) has been introduced as of 1 April 2023. The employer is newly obliged to report every employee who is a foreign national benefiting from temporary protection status under a special legal regulation in an employment relationship, acting on the basis of an employment agreement or an agreement on the performance of work, regardless of whether participation in sickness insurance has been incurred. Therefore, persons not yet insured will also be registered.For newly recruited employees, the deadline for registration is 8 calendar days from the date of recruitment. For existing employees who are registered retrospectively by their employer with the CSSA, the deadline for registration is 30 April 2023.
Change in the conditions for the obligation to file a tax return
For the year 2023, a change in the amount of the limit for the obligation to file a tax return from the current CZK 15,000 to CZK 50,000 has been approved. The amount of the limit for the obligation to file a tax return for a taxpayer with employment income whose other income under Sections 7 to 10 exceeds CZK 20,000 has also been changed. Previously, this amount was CZK 6,000.
Graceful Summer III
According to the approved bill, the third Graceful Summer should take place in the period from 1 July 2023 to 30 November 2023. This time, administrative garnishments, i.e. debts on social insurance or tax arrears, will be remitted. After the principal has been paid, tax and insurance related expenses (interest, penalties, fines, legal costs) will be remitted. For debts exceeding CZK 5,000, debtors will be allowed to distribute their payment in several installments.
Whistleblowing and the upcoming new legal obligations for employers
With an anticipated effective date of 1 July 2023, the proposed Whistleblower Protection Act is expected to create new whistleblowing-related obligations for employers from both the private and public sectors employing more than 50 employees. Although the final form of the act is not yet clear, the obligation for obliged entities (employers) to establish an internal whistleblowing system for receiving notifications is inevitable. Among other things, employers will be obliged, to assess the reasonableness of the adopted measures and take any corrective measures, designate a trained person (or persons) responsible for receiving and handling employee notifications according to established procedures and rules and keeping records of complaints received. At the same time, the bill provides for a strict prohibition of retaliation against whistleblowers, thus guaranteeing the broadest possible level of protection for whistleblowers, covering all sub-aspects of the employment relationship (not only its termination and changes but also remuneration, career advancement, working conditions, etc.).
Exemption of non-monetary payment of employee benefits in the form of monetary payment
We return to the issue of the exemption of non-monetary payment in respect of employee benefits (for specified purposes) in the form of a monetary payment to the employee for expenses incurred by the employee.In its judgement from November 2022, the Supreme Administrative Court disagreed with an earlier regional court ruling that held that direct reimbursement of an employee’s service expenses was non-taxable when the employer paid money to the employee based on the employee’s documented expenses. In its judgment, the Supreme Administrative Court disagreed with the Regional Court’s conclusion and held that the provision of vouchers, such as Flexipasses, for the purchase of a service or other benefits of a similar nature that are not redeemable for money, or a situation where an employer pays a sum of money to a third party by means of an invoice in order to provide a benefit or service to an employee or a member of the employee’s family, can be considered a non-monetary payment.
Possibility of extending the notice period during its course
The Supreme Court addressed the question of whether an employer and an employee can validly conclude an agreement to extend the notice period at a time when the notice period is already running. It concluded that it is possible to conclude an agreement to extend the notice period during its course. However, the content of such an agreement must clearly indicate when (on which date) the employment relationship of the parties is to end. At the same time, the notice period must be agreed in such a way that its duration after the extension is proportionate to the circumstances of the particular case. Otherwise, it would be an invalid legal act as defined in Section 580(1) of the Civil Code.
