Income Tax 2025: Six Key Changes Introduced by the Employer’s Unified Monthly Report Act (JMHZ)

With the adoption of the Employer’s Unified Monthly Report Act (JMHZ), an accompanying law amending the Income Tax Act (Act No. 586/1992 Coll., “ITA”) was also approved. Below is an overview of six major changes.

1. Adjustment of the R&D Tax Deduction (§ 34a ITA)

The amendment modifies the structure of the R&D deduction and brings new limits and higher tax support for companies:

• The deduction can be applied within five subsequent periods.
• The deduction equals 150% of eligible expenses, up to CZK 50 million.
• Above this limit, only a 100% deduction applies.
• The CZK 50 million cap is assessed for the entire “deduction group” (including related parties).

2. Removal of the Limit on Securities and Share Exemptions (§ 4 para. 1 letters u) and zk) ITA)

• The annual exemption limit of CZK 40 million from the sale of securities and shares is abolished.
• The standard holding period of 3 years for securities and 5 years for shares applies.
• For crypto-assets, the CZK 40 million exemption limit remains in place.

3. New Regime for Employee Stock Options (§ 6 ITA)

A new concept of the qualified employee stock option has been introduced, defining clear conditions:

• Must be agreed in writing, granted free of charge, and with a fixed exercise price.
• Exercisable after 3 years (exceptions: majority share sale or IPO).
• The employer must report the option to the tax authority.
• Qualified employee: holds a max. 5% share, employed for at least 12 months, earning at least 1.2× the minimum wage.
• Qualified employer: turnover up to CZK 2.5 billion, assets up to CZK 2 billion, not part of a larger group.
• Taxation occurs upon sale of the shares acquired through the option:
  • The market value of the option is income under § 6.
  • The difference between market value and exercise price is income under § 10.
  • The difference between sale price and market value is also income under § 10.
• This income is exempt from social and health insurance contributions.

4. End of Withholding Tax for Selected Income (§ 22 para. 1 ITA)

• Withholding tax is abolished for:
  • Agreements to complete a job (DPP),
  • Agreements on work performance (DPČ),
  • Remuneration of members of statutory bodies – for non-resident taxpayers.
• A standard advance tax will now apply instead.

5. Definition of Leisure-Time Benefits (§ 6 para. 9 ITA)

Employee benefits are now clearly distinguished from salary or remuneration. The following remain tax-exempt:

• Sports and cultural vouchers,
• Educational courses and similar benefits.

6. New Definition of a Low-Emission Vehicle (§ 6 para. 6 ITA)

The ITA introduces its own definition:

• Low-emission vehicle = CO₂ emissions up to 50 g/km (not zero-emission).
• For such vehicles, employees include only 0.5% of the acquisition price in taxable income (instead of 1%).
  Employers should review vehicle registration documents to ensure correct tax treatment of company cars.

If you have any questions, please contact the PKF APOGEO Tax Team.