The Senate rejected the Bill on Taxation Changes at its last session on 12 September. The Bill was proposed by the former governmental coalition with relation to the promulgated New Civil Code. The Bill aimed at unifying terminology of the New Civil Code as well as at some substantive changes of the system of taxation. The Bill broadened tax exemption on income tax (the income tax should not be collected in the case of dividends; that was heavily criticized by the President Miloš Zeman as well as by the Social Democratic Party). The Senators also rejected the change of the tax on real estate acquisition. Primarily the former governmental party TOP09 declared its attempt to move the duty to pay the tax on the acquirer which would lead to simplification of the process as well as legal stability during the process of real estate property rights transfer. By rejecting that, the Senate also hindered implementation of some economic growth enforcing measures (primarily tax reliefs).
Senators declared their criticism to the Bill that the previous government put together the economic changes with changes incrementally related to the New Civil Code. From the economic perspective the leftist parties criticized the abolition of dividends taxation as it would decrease incomes of state budget.
The rejection of the Bill endangers efficient functioning of the New Civil Code. The Bill cannot be discussed at the Chamber of Deputies as it has been dissolved. According to some senators, the Ministry of Finance should prepare another version of the Bill to be passed as legal measure.
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5th February 2020
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1st April 2020