Planned changed in the area of property amortization
In September 2020, The Budget Commission recommended not only that the Chamber of Deputies of the CR pass the government package for 2021, but likewise inserted its change proposals into it – among others, they concern changes in the area of property amortization. These are intended to support entrepreneurial subject investment.
One of the proposed points is the implementation of special amortizations of property in the 1st and 2nd amortization groups which were procured in the period of 1st January 2020 to 31st December 2021. For this property, it is newly to apply that property classified in the 1st amortization group should be amortized in 1 year instead of the current 3 years, and property in the 2nd amortization group 2 years instead of 5 years.
The change proposals further include increasing the limit amounts for classification of separate movable items into the category of tangible assets, and its technical appreciation from CZK 40K to the amount of CZK 80K.
The Budget Commission likewise proposed the abolition of tax amortization in intangible assets. For tax purposes, these would be amortized in the same way they are in accounting. It should thus newly apply that accounting amortization of intangible assets will likewise be tax-eligible in the full amount. It needs to be observed that this measure is related to property procured after this change comes into effect.
In our opinion, these change proposals in the area of corporate income tax are very favourable, for they react to the current situation with the aim of supporting investment into fixed assets used for enterprise. We should therefore like to express our full support to this proposal.