Czech Republic
Financial Year – 1 January – 31 December
Currency – Czech koruna (CZK)
Corporate Tax Summary
Residence – A company is tax resident in the Czech Republic if it has its seat or place of management in the Czech Republic. A company is non-resident if it does not have its seat in the Czech Republic, or if non-residency results from a relevant double tax treaty.
Basis of Taxation – A resident company is taxable in the Czech Republic on its worldwide income. A non-resident company is taxable only on its income from Czech sources. The tax rates are the same for resident and non-resident companies.
| Reference | ||
| Corporate Income Tax Rate (%) | The general Czech corporate income tax rate is 19% | |
| Branch Tax Rate (%) | There is no specific branch tax. | |
| Withholding Tax Rate: | ||
| Dividends – Franked | NA | |
| Dividends – Unfranked | 15% / 35% | Generally 15% for recipients resident in other member states of the European Union, the European Economic Area or in countries with which the Czech Republic has concluded a tax agreement. For any other recipients, the rate is generally 35%. |
| Dividends – Conduit Foreign Income | NA | |
| Interest | 15% / 35% | Generally 15% for recipients resident in other member states of the European Union, the European Economic Area or in countries with which the Czech Republic has concluded a tax agreement. For any other recipients, the rate is generally 35%. |
| Royalties from Intellectual Property | 15% / 35% | Generally 15% for recipients resident in other member states of the European Union, the European Economic Area or in countries with which the Czech Republic has concluded a tax agreement. For any other recipients, the rate is generally 35%. |
| Fund Payments from Managed Investment Trusts | NA | |
| Branch Remittance Tax | NA | |
| Net Operating Losses (Years) | ||
| Carry Back | 2 years (newly enacted in 2020) | |
| Carry Forward | 5 years |
Individual Tax Summary
Residence – An individual is tax resident in the Czech Republic if he/she has a permanent home or “ordinarily resides” in the Czech Republic. Ordinarily residing includes staying in the Czech Republic for at least 183 days in the relevant calendar year.
Individuals not referred to above, or if covered by a relevant double tax treaty, are considered non-resident.
Basis of Taxation – A resident individual is taxable in the Czech Republic on his worldwide income. A non-resident individual is taxed only on his income from Czech sources. The tax rates are the same for resident and non-resident individuals.
Filing Status – The tax return is generally filed on an annual basis. The filing deadline is 1 April of the following year. A three-month extension of the filing deadline is automatically granted if a tax adviser is involved on the basis of a duly filed power of attorney. The above deadlines also apply to the tax liability declared in the tax return.
Advance tax payments may be due during the year. Their amount and frequency depend on the individual’s tax position from the previous year.
The tax period is generally the calendar year. Subject to certain criteria, the taxpayer may choose a tax period that is different from the calendar year for income from a trade or business.
Personal Income Tax Rates
| Taxable Income | Tax Payable – Residents | Tax Payable – Non Residents |
| Any amount of taxable income [1] | 15 | |
| Solidarity surcharge [2] | 7 |
[1] In order to calculate the taxable income for employees, employment income is increased by the social security and health insurance contributions payable by the employer.
[2] The solidarity surcharge is applied on the aggregate amount of taxable income from employment, trade and business which exceeds approximately CZK 1.7 million (2020 threshold).
Goods and Services Tax (GST)
| Rate | 21%, 15% and 10% |
| Taxable Transactions | Valued Added Tax applies to most sales of goods, the provision of services and imports by entrepreneurs (entities or individuals). |
| Registration | An entrepreneur is obliged to register for VAT if their taxable supplies in the immediately preceding period of 12 consecutive calendar months exceed CZK 1 million. An entrepreneur not exceeding this threshold may apply for voluntary VAT registration. |
| Filing and Payment | In addition to VAT returns, VAT control statements and, if applicable, EU recapitulative statements must be filed. The deadline for VAT filing and payment is the 25th day after the end of the VAT period. The VAT period is either the calendar month or the calendar quarter. |
Other Taxes Payable
| Tax | Reference |
| Payroll Tax | Employers are required to withhold tax on employees’ earnings. The rates are generally 15% and 7%, the latter being the solidarity surcharge (applying to the amount of taxable income exceeding approx. CZK 140.000 per month / CZK 1.7 million per year [2020 threshold]). |
| Stamp Duty | Real estate acquisition tax of 4% applies to most acquisitions of Czech real estate. The purchaser is required to pay the tax. An exemption may apply to certain types of transactions, such as specific intra-group restructurings and sales of ‘new’ buildings. |
| Land Tax | Real property tax is levied on Czech real estate including most buildings and land. The calculation mechanism is relatively complex. A property tax return must generally be filed by the owner of the real estate. If in subsequent years no ‘qualifying changes’ occur, there is no obligation to file a tax return in those years and the tax will be assessed by the tax authorities based upon the last return. |
Other taxes, such as road tax and excise duties, are in force in the Czech Republic. Your Ecovis contact will be able to provide further information.
Last updated: 03.07.2020