Taxes in Czech Republic
Taxation of residents and permanent establishments of foreign companies in the Czech Republic is carried out based on worldwide income. Non-residents’ income is taxed only at the source of origin in the Czech Republic.
Residents are business entities registered in the Czech Republic, as well as companies whose management is located in the Czech Republic. Permanent missions are considered to be enterprises with a permanent place of business in the territory of the country.
What are the taxes
There are direct taxes, indirect taxes, and fees in the Czech Republic jurisdiction. Each group has Its own rules and conditions.
Corporate income tax
Since 2010, the corporate tax has been set in the Czech Republic at 19%. The income of investment funds, investment companies, mutual funds, and pension funds is taxed at a minimum interest rate of 5%. Legal entities pay income tax under the mortgage system, and in the following year, they submit declarations, based on which the amount of income tax is determined. In the case of large investments, legal entities can use the simplified taxation system for 5 years. Subsequently, companies can use the right to reduce the tax base at the expense of project implementation costs in the amount of 100%.
Withholding tax
Dividends paid by a Czech company to a non-resident company are taxed in the Czech Republic at a rate of 15% if the recipient's country of residence has a DTT (Convention for the avoidance of double taxation) or TIEA (Tax Information Exchange Treaty) signed with the Czech Republic. If such agreements have not been concluded between the countries, a special tax rate on the payment of dividends comes into force, the amount of which is 35%. Typically, the rule concerns the payment of dividends to companies resident in offshore jurisdictions.
Personal income tax
According to official information, in 2020, the personal income tax (PIT) rate in the Czech Republic is 15%.
Request bookkeeping solution
If you have a company in Czech, it is mandatory to do accounting and complete all taxation rules according to Czech Republic laws. Our company provides consultations and highly qualified accounting solutions, on issues of legislation and taxation. We offer full accounting support in Czech. Please feel free to contact us and get quality accounting service in CR with us!
Tax system
The taxation system of the Czech Republic is similar to that of other European countries. The following taxes are levied in the Czech Republic: VAT, income tax, real estate tax, road tax, property tax, gift and inheritance tax, excise tax, real estate transfer tax, and tax on environmental protection.
Direct tax
Corporate income tax (corporate income tax), personal income tax, council tax levied by the government on behalf of the communes, property tax, a land tax levied by municipalities independently.
Indirect tax
VAT, excise taxes on fuel, tobacco, alcohol.
Fees
Annual registration tax, registration and stamp duties, import duties.
Business requirements
Legal entities are required to register with the tax office at the place of their legal address, private entrepreneurs – at the place of registration in the Czech Republic, within 15 days from the date of obtaining a permit to conduct business.
Business in Czech Republic
Our company provides services for setting up a company in Czech Republic. The specialists of our company have the necessary knowledge, experience and qualifications. We can offer a consultation with taxes in Czech Republic. In addition, we also provide business support, accounting and other services necessary for your business. Our specialists have vast experience in this field of activity. We will be happy to help you successfully open a business in Czech Republic.
Ready for next step
Accelerate your business growth while we take care of everything else.