On 29 September 2025, in connection with the adoption of the Employer’s Unified Monthly Report Act, the accompanying Act No. 360/2025 Coll. was also finally approved and published. This act gradually abolishes the so-called withholding tax on income from dependent activities.
It will take effect on 1 January 2026, introducing changes in the taxation of individuals – non-residents who are members of statutory bodies of legal entities. The current 15% withholding tax will be replaced by a standard advance tax of 15% or 23%, which may lead to a higher overall tax burden for non-resident directors or board members.
These individuals will also be required to file an income tax return if their annual income exceeds 36 times the average wage, i.e., CZK 1,762,812 for 2026 (based on an average wage of CZK 48,967). The structure of social security and health insurance contributions will remain unchanged.
These amendments are part of a broader legislative package accompanying the introduction of the Unified Monthly Employer Report, aimed at simplifying and unifying tax administration.
