Temporary increase in the limit for deducting gifts

We would like to inform you about an increase in the limit for deducting gifts from the tax bases for both, natural and legal persons. This change was already discussed last year, however, entered into force on 4 February 2021.

The amendment includes a temporary increase in the limit for deduction of gifts up to 30 % of the tax base for natural persons as well as legal persons.

However, as already mentioned above, this increase will apply only temporarily. Natural persons can use this benefit for the calendar years 2020 and 2021. The period for legal entities differs, and the increase will apply to those tax periods that ended in the period from 1 March 2020 to 28 February 2022.

The transitional arrangement explicitly states that a taxpayer who filed a corporate income tax return before the Act came into force may reduce the tax base for the tax period ending from 1 March 2020 to the date of entry into force of this Act. The taxpayer may reduce the tax base, according to Act No. 586/1992 Coll., as amended from the date of entry into force of this Act, in an additional tax return which he is entitled to file no later than at the end of the month following the month in which this Act entered into force.

From a practical point of view, the “EPO” application will report that there is an error in the declaration. However, this error will not prevent the submission of the declaration.

In case you would like us to help you regarding this matter, do not hesitate to contact us.