How to determine the non-monetary income of an employee in case of being provided with low-emission vehicles?

With effect from July 1, 2022, the Income Tax Act was amended, including also the field of free provision of so-called low emission vehicles (especially electric cars and plug-in hybrids) to employees for use, for business and private purposes. The Financial Administration of the Czech Republic has published information on the given issue. In the case of a low-emission vehicle, an amount equal to 0.5% of its entry price is now considered to be a non-monetary income of the employee. So far, the non-monetary income was set at 1% of the entry price of the vehicle, regardless of its driving mechanism.

The reduction of the percentage amount of the entry price from 1% to 0.5% for a low-emission vehicle will be applied to the entire tax period of 2022 (i.e. from January 1, 2022), although this law comes into effect during the course of the year. When calculating the monthly salary and the tax advance, the procedure starts from the month in which this law came into effect (i.e. from July 2022) according to the new legislation. For the previous months of 2022 (i.e. January to June), the lower tax base on income from dependent activity will be taken into account only as a part of the annual settlement, or on the basis of filed tax return.

The Financial Administration of the Czech Republic explains on its website, which vehicles meet the conditions settled for “low-emission vehicles”.

publikováno 26.09.2022
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