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

@article{349592,
   author = {Krajňák, Michal},
   article_number = {1},
   doi = {http://dx.doi.org/10.15826/jtr.2022.8.1.106},
   keywords = {Czech Republic; effective tax rate; personal income tax; social security contribution; tax burden; tax reform; tax credit; tax relief for taxpayer},
   language = {eng},
   issn = {2412-8872},
   journal = {Journal of Tax Reform},
   title = {Quo Vadis Tax and Levy Burden of Wages in the Czech Republic? Tax Reform in 2022},
   url = {https://econpapers.repec.org/article/aiyjnljtr/v_3a8_3ay_3a2022_3ai_3a1_3ap_3a25-39.htm},
   volume = {8},
   year = {2022}
}

TY  - JOUR
ID  - 349592
AU  - Krajňák, Michal
PY  - 2022
TI  - Quo Vadis Tax and Levy Burden of Wages in the Czech Republic? Tax Reform in 2022
JF  - Journal of Tax Reform
VL  - 8
IS  - 1
SP  - 25-39
EP  - 25-39
SN  - 24128872
KW  - Czech Republic
KW  - effective tax rate
KW  - personal income tax
KW  - social security contribution
KW  - tax burden
KW  - tax reform
KW  - tax credit
KW  - tax relief for taxpayer
UR  - https://econpapers.repec.org/article/aiyjnljtr/v_3a8_3ay_3a2022_3ai_3a1_3ap_3a25-39.htm
N2  - 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.
ER  - 

KRAJŇÁK, Michal. Quo Vadis Tax and Levy Burden of Wages in the Czech Republic? Tax Reform in 2022. \textit{Journal of Tax Reform}. 2022, vol.~8, No~1, p.~25-39. ISSN~2412-8872. Available from: https://dx.doi.org/10.15826/jtr.2022.8.1.106.