On 31 August 2026, the Czech Financial Administration (Finanční správa ČR) announced the cancellation of the obligation for public authorities to register witnesses in employee records and report data on witness allowances through the unified monthly employer reporting system (JMHZ). This change stems from a pending amendment to the Income Tax Act and the Act on Unified Monthly Employer Reporting, scheduled to take effect on 1 January 2027. The JMHZ system, which consolidates tax and social security reporting for employers, currently requires public sector entities to report witness fees as part of employee income. The amendment removes this administrative burden, aligning reporting requirements with the actual tax treatment of witness allowances, which are often exempt or subject to specific withholding rules. The move is part of a broader government effort to simplify compliance for public institutions and reduce redundant data submissions.
Key Takeaways
- Elimination of Witness Reporting in JMHZ: Public authorities will no longer need to register witnesses in employee evidence or transmit witness allowance data via the JMHZ interface. This reduces administrative workload and eliminates a source of reporting errors for government bodies, courts, and other public institutions that frequently engage expert witnesses.
- Alignment with Income Tax Amendment: The change coincides with the upcoming amendment to the Income Tax Act, which clarifies the tax status of witness fees. By removing the JMHZ reporting requirement, the legislation ensures that only taxable income components are captured in the monthly employer declaration, improving data accuracy for tax administration.
- Effective Date and Transition: The new rule applies from 1 January 2027. Public employers should update their payroll and reporting systems accordingly and cease transmitting witness-related data in JMHZ submissions for periods starting in 2027. The Financial Administration will issue detailed methodological guidance before the effective date to ensure a smooth transition.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement