Quo Vadis Tax and Levy Burden of Wages in the Czech Republic? Tax Reform in 2022

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F26867184%3A_____%2F22%3AN0000028" target="_blank" >RIV/26867184:_____/22:N0000028 - isvavai.cz</a>

Alternative codes found

RIV/61989100:27510/22:10249791

Result on the web

<a href="https://econpapers.repec.org/article/aiyjnljtr/v_3a8_3ay_3a2022_3ai_3a1_3ap_3a25-39.htm" target="_blank" >https://econpapers.repec.org/article/aiyjnljtr/v_3a8_3ay_3a2022_3ai_3a1_3ap_3a25-39.htm</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.15826/jtr.2022.8.1.106" target="_blank" >10.15826/jtr.2022.8.1.106</a>

Result language

angličtina

Original language name

Quo Vadis Tax and Levy Burden of Wages in the Czech Republic? Tax Reform in 2022

Original language description

The article deals with changes in personal income taxation in the Czech Republic in 2022 and their impact on the tax burden. The article also deals with the levy burden represented by payments for social security contributions. An extensive tax reform changing the method of taxation of income from dependent activities took place in the Czech Republic in 2021. Its continuing effects was added with impact of legislation changes after 1 January 2022. The most significant change is the increase in the taxpayer's relief by CZK 3,000. The assessment of how these changes affect the tax burden was made by calculating the effective tax rates. The research methodology includes methods of regression and correlation analysis and methods for time-series analysing. The average wages used by the Czech Social Security Administration for the purposes of calculating social security contributions were used for the analysis. The results show that the tax burden has decreased since 2022 if basic taxpayer relief is applied. For the taxpayer, who, in addition to the taxpayer's relief, also claims a tax credit for children, the tax burden increases slightly. Although in most cases, the income is subject to the nominal linear tax rate, in comparison with the previous year, there is an increase in the progressivity of the personal income tax due to the rise of the tax relief per taxpayer. On the other hand, social security contributions are both nominally and real linear. There are no significant reforms in this area in comparison with the tax burden. Due to the decrease in the tax burden, in some cases, the levy burden of social security contributions is higher, even though their nominal rate is lower than the nominal income tax rate.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

50206 - Finance

Project

—

Continuities

N - Vyzkumna aktivita podporovana z neverejnych zdroju

Publication year

2022

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Journal of Tax Reform

ISSN

2412-8872

e-ISSN

—

Volume of the periodical

8

Issue of the periodical within the volume

1

Country of publishing house

RU - RUSSIAN FEDERATION

Number of pages

15

Pages from-to

25-39

UT code for WoS article

000791336900002

EID of the result in the Scopus database

2-s2.0-85131291085