Update March 2025: Amended tax law for employee share awards approved by the Senate; awaiting the signature of the President of the Czech Republic. Expected to be published in March 2025 and to enter into force on 1 April 2025. Main change: Deferred income taxation (newly introduced in 2024) now only voluntary, i.e., the employer has a choice. Transitional rules for awards vested between January 2024 and March 2025 apply, and actions might be required before end of May 2025. Recommended that companies check their current tax / payroll positions and potentially adjust before end of May.

Update September 2024: Earlier this year, we reported that the income tax treatment of deferred share awards (RSUs, PSUs, etc) in the Czech Republic changed, but that the social security at that stage remained unchanged, thus resulting in different dates for income tax vs. social security. In the meantime, however, social security rules changed as well, such that social security (if applicable) will now be due on the same date(s) as income tax. For further information, please do not hesitate to contact us.

Update April 2024: Under new tax legislation in the Czech Republic in effect since 1 January 2024, income tax on deferred share awards (PSUs, RSUs etc.) does no longer apply on the vesting / share transfer date, but will be deferred until the sale of shares (or, if earlier, the date when the employee leaves the company or the country), but maximum 10 years from the delivery date. If plan costs are borne by the local Czech employer, social security and health contributions, however, still apply on the vesting / share transfer date.