Increased child tax bonus valid from 1.7.2021

Increased child tax bonus valid from 1.7.2021

Increased child tax bonus valid from 1.7.2021
With effect from 1.7.2021, the law introduces an increased tax bonus for children aged over 6 and under 15. The tax bonus for the above-mentioned age group is 1.7 times of the basic tax bonus.

The child's legal representative (parent) is entitled to an increased tax bonus automatically and does not have to apply specifically for it. The tax bonus of 1.7 times is EUR 39.47/child/month and is applicable from 1.7.2021 to 31.12.2021. Subsequently, from 1.1.2022, the multiple of the basic tax bonus is increased to 1.85 times of the basic tax bonus.

At the same time, the amendment to Act No. 544/2010 Coll. valid from 1.8.2021 introduces the possibility of a legal representative of a child over the age of 6 years and less than 15 years to claim a subsidy to support education on the child's eating habits ("food subsidy"). Entitlement to the food subsidy is not automatic and the legal representative has to apply for it from the school canteen provider with an affidavit declaring that non legal representative of a child is claiming an increased tax bonus.

Since the food subsidy is EUR 1.30/day/child, for the legal representative who meets the criteria for claiming the tax bonus, it is more advantageous to apply an increased tax bonus than food subsidies. In the event of a situation where the legal representative is not able to claim a tax bonus (e.g., loss of employment) in a particular month, he/she may apply for a food subsidy. However, it should be noted here that for the months when the food subsidy is applied, the legal representative cannot claim the tax bonus even in the annual tax settlement /filing of the tax return for the respective tax period.

The employee is obliged to notify the employer of the change in the application of the tax bonus (application of the food subsidy) in the declaration for the application of the non-deductible part and the tax bonus (so called “Vyhlásenie”).

For more information, do not hesitate to contact us.