Marcel Muráni, Tax Advisor
In anticipation of the end of the 2024 tax period, we provide an overview of the key points that will impact the corporate income tax base for the year 2024. At the same time, we present an overview of what needs to be prepared for the upcoming tax period.
Minimum corporate tax
Law No. 530/2023 Coll. § 46b of the Income Tax Act reintroduces the concept of a minimum tax (similar to the tax licence last paid in 2017) for a corporate taxpayer, effective from January 1, 2024.
This refers to the minimum tax to be paid by the taxpayer if the calculated tax liability in the tax return is lower than the minimum tax amount set out in paragraph 2 of § 46b of the Income Tax Act, even if the taxpayer reports a tax loss or zero tax liability in the tax return.
The obligation to pay the minimum tax is determined after deducting tax allowances according to § 30a (for recipients of investment aid) or § 30b (for recipients of incentives) and after crediting the tax paid abroad according to § 45 of the Income Tax Act.
The amount of the minimum tax depends on the taxable income (revenue) achieved, with taxable income being determined based on the definition in § 2 letter h), i.e. income subject to tax and is not exempt from tax, as follows:
|
Achieved taxable income (TI) |
Minimum tax amount |
|
TI ≤ 50 000 |
EUR 340 |
|
50 000 < TI ≤ 250 000 |
EUR 960 |
| 250 000 < TI ≤ 500 000 |
EUR 1 920 |
| 500 000 < TI |
EUR 3 840 |
How to reduce the minimum tax?
The Act allows the minimum tax to be applied at half the rate for a taxpayer whose average number of employees with disabilities for the tax period is at least 20% of the total average number of employees.
When is the minimum tax not payable?
According to § 46b, paragraph 7 of the Act, situations when the minimum tax is not payable are listed exhaustively:
- a newly established taxpayer – for the tax period in which it was established,
- a taxpayer not set up or established for business purposes – e.g., interest associations of legal entities, professional chambers, civic associations, etc.,
- a taxpayer with the legal form of a general partnership (v.o.s.) – the exemption arises from the specific definition of the tax subject for such a taxpayer, whose income is taxed by withholding according to § 43,
- a taxpayer operating a sheltered workshop or sheltered workplace,
- a taxpayer in bankruptcy or liquidation.
Income tax rate for the year 2024 vs. 2025
The taxpayer, a legal entity, must monitor the amount of its achieved taxable income (revenues) in order to correctly determine the tax rate it will apply in its tax return.
The following table provides an overview of the rates for each tax period.
|
Tax period |
Achieved taxable income (TI) |
Tax rate |
|
2024 |
(TI) ≤ 60 000 | 15 % |
|
2024 |
(TI) > 60 000 |
21 % |
|
2025 |
(TI) ≤ 100 000 |
10 % |
|
2025 |
100 000 < (TI) ≤ 5 000 000 |
21 % |
| 2025 | (TI) > 5 000 000 |
24 % |
Micro-taxpayer
The micro-taxpayer status was introduced into the law with effect from January 1, 2021, and applies to both natural persons and legal entities.
With effect from January 1, 2024, the taxable income threshold for determining the status of a micro-taxpayer is increased to EUR 60 000. We would like to point out that starting from January 1, 2025, this amount does not change to EUR 100 000 and therefore does not copy the amount of taxable income for determining the tax rate, as was the case before.
Other conditions for achieving micro-taxpayer status are:
- the taxpayer is not a dependent according to § 2, letters n) to r), and does not carry out controlled transactions during the tax period,
- it has not been declared bankrupt, entered into liquidation or been granted a repayment plan,
- its taxable period is not less than 12 consecutive calendar months, except for a taxpayer who has a shorter taxable period due to death.
If a legal entity meets the above conditions for the tax period 2024, it can benefit from the following advantages:
- preferential depreciation of tangible assets,
- tax loss deduction up to the amount of the tax base,
- simplified inclusion of allowances for bad debts into tax expenses,
- depreciation of receivables into tax expense up to the amount of the allowance to the extent that it would have been expensed in the accounts.
The information above on this website is intended to give you a basic overview of tax, accounting, and legal regulations. They do not in any way serve as a guide for their application in practice, which may differ significantly from the legislation in force at the time. The information on this website does not guarantee legal, accounting, tax or other professional advice or services. As such, information should not be taken as a substitute for professional consultations with accountants, tax, legal or other advisors. EMINEO PARTNERS shall not be liable and shall not be liable for any discrepancies, omissions or results obtained from the use of this information. All information and examples are provided without any guarantee of their applicability in practice. EMINEO PARTNERS is not obliged to reflect the applicable legislation on the information and examples provided on this website.
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