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VGD News February 2018

Stages 3 and 4 of Electronic Records of Sales

Stages 3 and 4 of Electronic Records of Sales The Constitutional Court in Brno has deferred the effective dates of stages 3 and 4 of Electronic Records of Sales (in Czech: elektronická evidence tržeb, EET). In stage 4, manufacturing businesses and selected trades will have to comply with the requirements of EET. In stage 3, EET will apply to all other entrepreneurs, excluding those specified in stage 4. Originally, stage 3 was supposed to come into effect on 1 March 2018, and stage 4 on 1 June 2018. However, based on the decision of the Constitutional Court in Brno, EET stages 3 and 4 will only come into effect once the EET legislation has been amended. A draft amendment of the EET legislation is being considered, but the government has issued a negative opinion on the draft amendment. The government plans to implement the changes required by the Constitutional Court into its own government draft legislation. It has not been prepared yet, though. Therefore, the effective dates and scopes of EET stages 3 and 4 cannot be estimated.

In addition, the Constitutional Court in Brno has cancelled the contested parts of EET legislation concerning cashless transfers and certain mandatory data shown on receipts. Effective 1 March 2018, receipts will not have to show birth registration numbers of entrepreneurs who are natural persons (however, VAT payers will have to show their TINs on their VAT documents). EET requirements will not apply to sales paid by card, and by similar cashless transfers. Entrepreneurs may record such payments voluntarily.

Income Taxes

In the 2017 tax period, self-employed persons may choose from 2 options of claiming their expenses. The first option is that they claim their expenses under the old rules: they claim expenses as higher percentages of their income, without the possibility to claim tax credits per each maintained child and per a spouse. The second option is that self-employed persons apply the new rules effective in 2018: they claim their expenses as new, lower, percentages of their income, and they will be permitted to claim tax credits per each maintained child and per a spouse.

In the 2018 tax period, there will be only one option. If self-employed persons claim their expenses as percentages of their income, then the ceiling of their expenses will be CZK 800 000 for vocational trades and farmers. The ceiling of CZK 600 000 will apply to other trades, the ceiling of CZK 400 000 will apply to other income from independent activities, and the ceiling of CZK 300 000 will apply to income from lease. In addition, self-employed persons will be permitted to claim tax credits per each maintained child and per a spouse.

GDPR

In November 2017, we informed you about the GDPR in detail. In connection with the GDPR, there is also a new legislation: ePrivacy. ePrivacy will replace the old legislative regulation concerning privacy and electronic communication. ePrivacy will apply to a much wider scope of persons than the old legislative regulation. The old legislative regulation applied only to mobile network operators. ePrivacy will apply also to providers of communication services (such as WhatsApp, Facebook Messenger, Skype, and Gmail), to all providers of electronic communication services (even if it is an additional service only), and to all companies which use electronic communication for direct marketing.

ePrivacy is to have the same effective date as the GDPR, that is, 25 May 2018. However, it has not been completed yet, and experts expect that it will come into effect later than the GDPR.

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