Earlier pension systems were based on the social solidarity principle of society in most countries. An increase in the number of people of retirement age, together with a simultaneous reduction in the number of economically active persons, make these systems inadequate and significantly burden state budgets. Attention is paid to other kinds of pension security that encompass voluntary and individual supplementary insurance.
The Czech tax system provides support for retirement saving in the form of tax base deductions. The support is realized either through a state contribution when fulfilling the legal conditions for the supported tax-exempt financial product, or through the option of reducing the tax base by the amount paid on a supported product.
There is also an effort by the state to open and offer the widest possible range of products. The effect of the deduction from the tax base is related to the progressivity of taxation. In the Czech Republic, a drastic change took place in 2008. The pay-as-you-earn progressive tax of individuals was put aside, and a uniform tax rate of 15% was introduced. Thus, the effect of deductible items was reduced, which were predominantly used by the middle class.
This paper is aimed at tax allowances, which are intended to support old-age security in the form of voluntary and individual savings. In addition to their description, the means by which these options are used by tax entities are also clarified. The aim of the research is to assess the use of legislative tax tools that lead to an increase in the effectiveness of the given measures. Methodically the research is based on the evaluation of secondary statistical data from the Czech Statistical Office and the Financial Administration of the Czech Republic. The data is statistically supported by primary research carried out in 2016, intended to evaluate the attitude of individuals in relation to tax allowances in the context of the old age security.