Pravidla pro zdanění akciových plánů se zase zjednoduší

Share plan taxation rules to be simplified again

Almost to the day exactly one year ago (details can be found HERE), we informed you of changes to the taxation of employee stock and option plans. Today, a draft bill has been introduced that will again modify the tax treatment of these plans.

If adopted, employers will only have the possibility, not the obligation, to apply deferred taxation. Currently, deferred taxation of such income is mandatory, although this can present many significant challenges for larger companies or so-called internationally mobile employees.

The proposed election - i.e., the intention to take advantage of the rules in effect as of January 1, 2024, under which taxation is deferred - will require an active step by the employer, which will have to notify its intention to the tax authorities by the 20th day of the calendar month following the month in which the employee acquired the share or option. If the employer fails to make such notification, the rules in force until 31 December 2023, which are generally in line with normal international principles, will apply.

For the sake of completeness, we would like to add that the new rules would apply not only to Czech companies (taxpayers), but also to foreign companies that are not Czech taxpayers but nevertheless provide shares/options to employees within the group.

Even if the employer follows the rules applicable until 31 December 2023, certain steps may need to be taken. Still, this is a change that clearly gives employers more control over the correct taxation of the income they provide to their employees.

If this bill is passed, which can realistically be expected, companies providing such benefits to their employees must be prepared to take the necessary steps as soon as possible.

For further information and consultation on the practical implications of this legislative change, please contact our tax specialists.

Authors:

Michaela Felcmanová

Adam Linek