In late July, the Chamber of Deputies approved a bill referred to as EET 2.0. On August 19, 2026, the Senate debated the bill and returned it to the Chamber of Deputies with amendments. If enacted, the law will bring back the electronic sales registration system in a modified form starting January 2027, differing from the version repealed in 2023. While the new version retains the principle of central payment recording, it alters the scope of monitored transactions. Payments made in cash, by card, via QR code, or by "any future technology" will be subject to registration if conducted in personal contact.
With the new form of sales registration, the blanket obligation to print receipts is abolished. The most heavily debated area is the special "EET OFF" regime, which allows the smallest entrepreneurs to opt out of recording sales upon meeting specific conditions. The government projects an increase in public budget revenues of CZK 14 to 15 billion annually.
Alongside the registration system itself, the amendment is part of a broader tax package that also includes changes to income tax, VAT, and other contributions. Below, we provide a closer look at these key changes and their potential impacts.
VAT
Abolition of the Limitation on VAT Deductions for Luxury Cars
The exemption restricting input VAT—negotiated by the Czech Republic for the years 2024 to 2026, which limits the tax deduction claim upon the acquisition of a vehicle or its technical improvement to a maximum of CZK 420,000—is abolished effective January 1, 2027. Newly, a VAT payer will be entitled to claim a full VAT deduction regardless of the purchase price of the vehicle or the cost of technical improvements, provided, of course, that the automobile is used for economic or taxable activities.
Transitional provisions indicate that if a car was acquired (or technical improvements carried out) by the end of 2026 and registered in the Vehicle Register after January 1, 2027, the payer will be entitled to a full tax deduction. The new legislation also permits increasing the tax deduction claim for automobiles registered in the Vehicle Register in 2027—if a limited deduction was previously applied—via an amended tax return filed by the end of January 2027.
Application of the 12% VAT Rate to Non-Alcoholic Beverages Served in Restaurant Services
Currently, the reduced VAT rate applies only to tap water and dairy beverages (including plant-based alternatives) served within restaurant services. Effective January 1, 2027, the 12% VAT rate will apply to all non-alcoholic beverages.
However, the sale of non-alcoholic beverages outside of restaurant services (with the exception of tap water and dairy beverages, including alternatives) will continue to be subject to the standard 21% VAT rate.
Changes Concerning Small Bad Debts
Effective January 1, 2027, the conditions for adjusting the tax base for bad debts that are not enforced through execution or insolvency proceedings against the debtor are changing.
Newly, a creditor will be entitled to adjust the tax base if:
- The receivable does not exceed CZK 20,000 (instead of the previous CZK 10,000) including tax;
- The receivable is at least 3 months overdue (instead of the previous 6 months);
- The total of receivables against a single debtor does not exceed CZK 100,000 (instead of the previous CZK 20,000) including tax per calendar year.
Upon meeting these conditions, the creditor may report the adjustment in the tax return for any taxation period. The new conditions will also apply to bad debts arising from taxable supplies executed after January 1, 2025, for which the creditor initiates adjustments after January 1, 2027.
Concurrently with the above changes, the period after which a debtor (a payer who received a taxable supply and claimed a deduction) is obligated to reduce a previously claimed deduction—if the receivable has not been paid in full or in part—is shortened from 6 to 3 months, regardless of the amount of the receivable.
Personal Income Tax (PIT)
In addition to sales registration itself, the bill introduces several significant changes in personal income tax. Some measures directly tie into the new EET regime, while others represent independent adjustments to employee benefits, tax credits, or the taxation of tips, which the government presents partly as an effort to offset the impacts of the revived registration system. The amendment also establishes a higher income threshold triggering the obligation to file a personal income tax return.
Flat-Rate Regime and the New "EET Surcharge"
One of the most debated areas is the introduction of the EET OFF regime, under which entrepreneurs can avoid the obligation to record sales in exchange for a monthly surcharge to the flat-rate tax amounting to CZK 1,400. This regime is available to entrepreneurs in the first tier of the flat-rate regime whose income from independent activity does not exceed CZK 1 million per year. Enrollment must be notified to the tax administrator, typically by the 10th day of the relevant taxation period. If a taxpayer exceeds one million crowns in a given year after registering for the surcharge, the registration obligation will apply to them starting from the following taxation period.
From a practical standpoint, several open questions remain. For example, the Chamber of Tax Auditors of the Czech Republic points out that the legislation does not sufficiently clarify what precisely constitutes "income from independent activity" for assessing the CZK 1 million limit. It remains ambiguous whether all income under Section 7 of the Income Tax Act is decisive or only income relevant for entering the flat-rate regime.
Sales Registration Tax Credit
A new one-time sales registration tax credit of up to CZK 5,000 is introduced. This can be applied starting no earlier than the 2027 tax period. Its calculation is based on the positive difference between 15% of the partial tax base from independent activity and the basic taxpayer credit. The credit is intended to partially offset initial costs associated with introducing the registration system, such as acquiring a cash register system or technical equipment. However, its actual economic benefit will depend on the specific business model and the taxpayer's overall tax obligations.
Return of Certain Tax Credits and Exemptions for Benefits
The amendment also restores certain previously canceled tax relief measures. The student tax credit is reinstated at CZK 4,020 per year, along with the childcare credit (the "kindergarten credit") capped at the level of the minimum wage. For the kindergarten credit, the proposal simultaneously details the conditions for its application, including a new reporting obligation for preschool facilities toward the tax administrator. They will be required to electronically report data on children and paid amounts to the tax administration no later than January 31 following the end of the respective calendar year.
Significant changes also affect employee benefits. The provision of leisure-time benefits will be exempt from tax at any value, while the exemption for recreational contributions and package tours will remain capped at CZK 20,000 per calendar year.
The exemption for reasonable company-wide social events organized by the employer remains unchanged; their regulation is simply moved to the same provision governing leisure-time benefits.
Employee Healthcare Benefits
The amendment envisions abolishing the income tax exemption limit for general leisure-time benefits, while health-related benefits remain tax-exempt up to the amount of the average wage for the tax period. However, the amendment introduces a new Schedule No. 4 containing employer provisions for employee healthcare that will be entirely outside the scope of employment income tax. These include, for instance, premium preventive medical check-ups, selected medical examinations, certain vaccinations, and more.
Additionally, a new category of exempt benefits in social care is established. Non-monetary contributions will be tax-exempt if provided by the employer to an employee or their family member for selected social services (e.g., care services, personal assistance, emergency care).
Tips under a New Exempt Regime
A significant change for gastronomy and hospitality is the new tax treatment of tips, aiming, among other things, to incentivize the official reporting of tips and strengthen the legal income of gastronomy workers. The amendment introduces an income tax exemption for tips derived from catering services, up to a limit equivalent to a 7% share of the employer's monthly revenues from catering services. Despite detailed statutory definitions of tips and exemption conditions, this area raises several interpretive questions, particularly concerning the ambiguous calculation of the exemption limit, uncertainties regarding the distribution of tips among employees, and whether the regime also applies to self-service operations or fast-food concepts. The question of how tips will be assessed on the employer's expense side from a corporate income tax perspective also remains open.
Raising the Threshold for the Tax Return Filing Obligation
The income threshold triggering the obligation to file a personal income tax return is raised from the current CZK 50,000 to CZK 100,000.
In situations where an individual has other income under Sections 7 to 10 of the Income Tax Act in addition to employment income during the tax period, the threshold for filing a tax return is increased from the current CZK 20,000 to CZK 40,000.
As noted, the Senate debated the bill on August 19, 2026, and returned it to the Chamber of Deputies with amendments. The Chamber of Deputies will therefore make a final decision on the final form of the legislation. Furthermore, given that the new legislation appears ambiguous in certain areas and may allow for multiple interpretations, methodological guidance from the tax administration can be expected in the future.
This text was translated by AI.
