In 2013, in accordance with the national action plan the Czech government adopted a policy with new measures fostering vocational education and training (VET). It defines main steps to improve quality and participation in VET.
Among other measures, the Act on income taxes (No 586/1992 coll.) was amended in January 2014. The amendments allow employers to include direct and indirect investments in VET (secondary and tertiary) as deductible expenses and receive corporate income tax benefits.
The tax benefits were proposed by the Ministry of Industry and Trade in cooperation with Confederation of Industry, Chamber of Commerce, Industry and Higher Education Institutions’ Forum, Ministry of Education, Youth and Sports, and Ministry of Finance. They aim to promote investment in education and motivate enterprises to increase provision of corporate scholarships and training. Employers providing non-subsidised training and internships can deduct eligible expenditure from tax.
The following expenditure is exempt from corporate income tax:
- monthly scholarships up to CZK 5000 (increased from CZK 2000) for secondary VET and CZK 10000 (increased from CZK 5000) for higher VET;
- CZK 200 per hour for provision of training or internships for VET students;
- 50-110% of assets depending on extent of their use for training.
The tax benefits improve cooperation between employers and VET schools. They also promote work-based learning for VET students and use of modern equipment (in enterprises) instead of often outdated school equipment.