{"id":3404,"date":"2024-01-05T17:50:39","date_gmt":"2024-01-05T16:50:39","guid":{"rendered":"https:\/\/www.hast-ak.com\/?p=3404"},"modified":"2024-01-14T15:03:26","modified_gmt":"2024-01-14T14:03:26","slug":"2024-brings-many-legal-developments-what-are-they","status":"publish","type":"post","link":"https:\/\/www.hast-ak.com\/en\/real-estate\/2024-brings-many-legal-developments-what-are-they\/","title":{"rendered":"2024 brings many legal developments – what are they?"},"content":{"rendered":"\n

Machine Translation<\/em><\/p>\n\n\n\n

The Czech media often report that the biggest legislative change in 2024 is the so-called consolidation package.[1]<\/a> However, this is not entirely true, as there are many other innovations that are not to be overlooked.<\/p>\n\n\n\n

1. Employment news<\/h2>\n\n\n\n

Minor changes to the Labour Code have already entered into force on 1 October 2023. You can read more about this here: https:\/\/www.hast-ak.com\/pracovni-pravo\/zmeny-v-pracovnim-pravu-platne-od-01-10-2023\/<\/a><\/p>\n\n\n\n

1.1. Holidays of employees working on the basis of agreements (FTE and FTE)<\/h3>\n\n\n\n

However, as of 01.01.2024, further changes will be added to this, in particular in the context of agreements held outside the employment relationship.[2]<\/a> The Labour Code introduces the entitlement to paid leave for workers under a work performance agreement (WPA) and an activity performance agreement (APA). As long as the employment relationship lasts for a continuous period of at least four weeks and at least 80 hours are worked, these workers are entitled to holiday pay in the same way as regular employees.<\/p>\n\n\n\n

1.2. Minimum and average wage<\/h3>\n\n\n\n

The minimum wage is increased to CZK 18,900.<\/strong><\/p>\n\n\n\n

The general assessment base has been set at CZK 40,638 by government decree[3]<\/a> and the conversion coefficient at 1.0819. The average wage for 2024 is therefore CZK 43,967.<\/strong><\/p>\n\n\n\n

1.3. Allowance for meals<\/h3>\n\n\n\n

As of 01.01.2024, employer contributions for employee meals will be unified. The term “meal allowance” now includes both meal vouchers and meals provided at the workplace as well as a meal voucher lump sum<\/strong>. It is a part of an employee’s income that is exempt from tax if he or she has worked at least 3 hours during the shift and has not been entitled to a meal allowance under travel allowances.<\/p>\n\n\n\n

The tax exemption for employees is limited to 70% of the upper limit of the meal allowance that the employer can provide for a business trip lasting between 5 and 12 hours. If the employee works more than 11 hours, the employer may provide a second meal allowance. If your employer provides an allowance that exceeds this limit, the excess will be income that your employer must tax and pay a contribution on.<\/p>\n\n\n\n

1.4. Higher foreign boarding fees<\/h3>\n\n\n\n

As of 1 January 2024, there will be changes in certain rates of foreign meal allowances that are compulsorily paid by the employer when you are sent to work outside the Czech Republic. The rates of foreign travel allowances for 2024 are set by Decree No. 341\/2023 Coll.<\/p>\n\n\n\n

The changes concern countries such as Croatia (in 2023 the rate was EUR 40, from 2024 it will be EUR 45), Hungary (in 2023 the rate was EUR 40, from 2024 it will be EUR 45) or Spain (in 2023 the rate was EUR 45, from 2024 it will be EUR 50). Some rates in countries such as Germany or Austria remain the same (EUR 45).<\/p>\n\n\n\n

1.5. Employee benefits<\/h3>\n\n\n\n

Restrictions on employee benefits are threatened by the effectiveness of the so-called consolidation package. As part of the tax adjustments, a limit was set for the tax deductibility of these types of employee benefits, up to one half of the average wage for a given tax period (in 2024, i.e. up to CZK 21,983). Benefits that exceed the limit will enter the employee’s tax base and will therefore be subject to health and social insurance contributions as well as personal income tax on employment, which is extremely disadvantageous for both parties.<\/p>\n\n\n\n

1.6. Changes to the FKSP<\/h3>\n\n\n\n

As of 1 January 2024, the Cultural and Social Needs Fund <\/strong>(CSF) will be reduced by half, i.e. from 2% to 1% of the costs charged to salaries\/wages.  Another new feature is that at least half of the basic allocation to the fund will be mandatorily earmarked to support old-age security products for employees.<\/p>\n\n\n\n

Currently, the amount of funds for the FKSP is set at 2% of the salary funds, which amounts to CZK 5.2 billion for 2023 only in regulated organisational units of the state and contributory organisations. The rules for the use of the FKSP will no longer be regulated by the Decree on the Cultural and Social Needs Fund, which will be repealed.<\/p>\n\n\n\n

1.7. Cancellation of further agreed overtime in the health sector<\/h3>\n\n\n\n

As of 1 January 2024, the institute of additional agreed overtime work in the healthcare sector will be abolished. It will also be possible for selected employees in the healthcare sector to work up to 24 hours at a stretch under certain conditions. In this case, the employee will be guaranteed an immediate follow-up extended rest period (22 hours in the case of 24-hour work).<\/strong><\/p>\n\n\n\n

1.8. Reduction of home office compensation<\/h3>\n\n\n\n

In October 2023, an amendment to the Labour Code came into force, introducing rules for home office work. The legislator made it mandatory for employers to reimburse employees for costs related to their work at home – the so-called lump sum. This amount was set at CZK 4.60\/hour, for 2024 this amount is set at CZK 4.45, after rounding to CZK 4.50\/hour.<\/p>\n\n\n\n

1.9. Change in the fight against illegal work<\/h3>\n\n\n\n

The labour inspectorate will be able to prohibit a given activity if it is proven that illegal work is being performed, and the labour inspectorate will also be able to use secondary sanctions (not providing benefits, not being able to employ foreigners). Furthermore, the liability for fines for illegal work will be extended so that it will not be profitable to circumvent the prohibition of illegal work through dubious subcontractors.<\/p>\n\n\n\n

2. Change in the amount of compulsory contributions for self-employed persons<\/h2>\n\n\n\n

From the new year, the contributions of self-employed persons will increase. It is planned that in 2024-2026, the minimum assessment base for social insurance for self-employed persons will increase from 25% to 40% of the average wage, i.e. by 5 percentage points per year, bringing the minimum assessment base closer to the minimum wage. At the same time, self-employed persons will pay insurance premiums on at least 55% of the tax base instead of the current 50%. Both groups (employees and self-employed) are taxed equally at a tax rate of 15% for the tax base up to 36 times the average wage and 23% for the part of the tax base exceeding 36 times the average wage. For employees, the tax base is the so-called gross wage, while for self-employed persons the tax base is the difference between income and expenses.<\/p>\n\n\n\n

Social insurance<\/h4>\n\n\n\n

The minimum monthly assessment base for the main activity for 2024 is 30% of the average wage, i.e. CZK 13,191. The minimum advance payment for the main activity is therefore now CZK 3,852<\/strong>.<\/p>\n\n\n\n

The minimum advances for self-employed persons in secondary activities are now based on the assessment base corresponding to 11% of the average wage, i.e. on the amount of CZK 4837. The new amount of the advance payment is CZK 1,413<\/strong>.<\/p>\n\n\n\n

The secondary activity will also not be conditional on receiving the so-called parental allowance. Self-employed persons will now carry out secondary activities on the grounds of childcare for children up to 4 years of age. Until now, the condition for the secondary activity was linked to the receipt of parental allowance. For the purposes of pension insurance, the age of the child being cared for is no longer relevant.<\/p>\n\n\n\n

Sickness insurance<\/h4>\n\n\n\n

The minimum payment for sickness insurance for self-employed persons is set at 2.7% of the minimum assessment base and for this year it is CZK 216 <\/strong>per month.<\/p>\n\n\n\n

Health insurance<\/h4>\n\n\n\n

The minimum deposit for self-employed persons carrying out their main activity is CZK 2,968 in <\/strong>2024.<\/p>\n\n\n\n

These changes in advances have also been reflected in the case of the flat-rate tax.<\/p>\n\n\n\n

The payment for the first band <\/strong>increases by CZK 1,290 per month to CZK 7,498 <\/strong>(CZK 4,430 pension insurance + CZK 2,968 health insurance + CZK 100 income tax).<\/p>\n\n\n\n

The payment for the second band <\/strong>increases by CZK 745 per month to CZK 16,745 <\/strong>(CZK 8,191 for pension insurance + CZK 3,591 for health insurance + CZK 4,963 for income tax).<\/p>\n\n\n\n

The payment for the third band <\/strong>increases by CZK 1,139 per month to CZK 27,139 <\/strong>(CZK 12,527 for pension insurance + CZK 5,292 for health insurance + CZK 9,320 for income tax).<\/p>\n\n\n\n

3.     News in social security<\/h2>\n\n\n\n

3.1. Change in the internal structure of the Czech Social Security Administration and the creation of a new office “Institute for Health Assessment”<\/h3>\n\n\n\n

As of 01.01.2024, there has been a change in the internal structure of the \u010cSSZ, which will not affect the citizens of the Czech Republic, as all branches will remain unchanged. The change consists only in the administrative division of the \u010cSSZ.[4]<\/a><\/p>\n\n\n\n

The Institute of Health Assessment will be based in Hradec Kr\u00e1lov\u00e9 and its task will be:<\/p>\n\n\n\n