Act on proof of origin of property

The act which modifies some legislation relating to providing the proof of origin of property was published in the beginning of September in the Collection of Laws under 321/ 2016 Coll. The act comes into force 1st December 2016. As we have informed you before, this act aims mainly to modify current provisions and mechanisms regarding income tax so that it is possible to reveal undeclared or concealed income and subsequently make it subject to taxation. Limit of the difference between the increase of taxpayer’s capital, its usage or other expenses, and the income subject to taxation and stated in tax returns was set at 5 million CZK. In case the taxpayer exceeds this limit, tax authorities will ask him or her to provide a proof that the financial means were duly taxed or are not subject to taxation. If he or she fails to provide the proof, an obligation to pay a penalty will arise for him or her and the tax amount will be assessed in a standard process of applying the rate of income tax.