Czech Republic Taxes





Last partial update, February 2024.

Czech Republic Tax Rates 2024

The Czech income tax rate for individual's income in 2024 is flat, a 15% rate.
A tax rate of 23% applies to income exceeding 48 times the average salary.

Czech personal tax rates 2024:

Income (CZK) %
1-1,582,812 15
Over 1,582,812 23
Corporate tax in 2024 is 21%.
Investment funds pay 5% corporate tax.
The rate of corporation tax is reduced constantly to encourage economic activity, so that for instance, the rate of corporation tax in 1992 was 45% as compared to the present rate of 19%.

Czech Republic Taxation of Individuals

An individual pays tax on his income as a wage earner or as a self-employed person.
Tax for an individual who meets the criteria of a "permanent resident" of the Czech Republic is calculated on his income earned inside the Republic and abroad.
A foreign resident who is employed in the Czech Republic pays tax only on income earned in the Republic.
An employer is bound to deduct, immediately on a monthly basis, the requisite tax from employees salaries.
A self-employed person must prepay taxes that will be offset on making an annual tax return.
The advances are determined on the basis of the previous year's tax return.
In the case of a new business, the prepayments are calculated on the basis of estimates made by the owner of the business.
Certain payments are deductible from taxable income as will be specified later.

Czech Republic Reporting Dates

The tax year in the Czech Republic is the calendar year ending on December 31.
If your income is derived solely from a salary, you are not bound to file a yearly return.
In all other cases, the annual return must be submitted by March 31 (3 months after the end of the tax year).
If you are represented by an authorized Czech tax advisor, you may make an application to submit the return by June 30.
A delay in submitting an annual return will entail fines, in most cases, of 10% of the tax payable.
Fines are imposed even after tax has been prepaid.



Czech Republic Corporate Tax

  • Czech Republic Corporate tax in 2024 is 21%.
  • A tax of 15%/35% is imposed on dividends paid by Czech corporations.
  • Dividend paid between 2 Czech companies is tax exempt subject to certain terms.
  • Income from interest is deemed ordinary income and as such is taxed at 19%.

Czech Republic Capital Gains

  • In general, capital gains in the Czech Republic are taxed as income for companies.
    Individuals pay generally 15% or 23% on their capital gains.
  • Capital gains from sale of shares by a company owning 10% or more is entitled to participation exemption under certain terms.
  • For an individual, gain from sale of main private dwelling, held for at least 2 years is tax exempt.
    Or,when not used as main residence, if held for more than 5 years.

Czech Republic Depreciation of Fixed Assets

The regulations on depreciation were amended in 1999 to enable a company to depreciate an asset over a shorter period than in the past.
As a general rule, the classes of fixed assets are divided into 6 groups (categories).



No. of years of depreciation Class of fixed asset Category
3 Automobiles and buses
Computers
Office equipment and machines
1
5 Machinery & equipment
Trucks & tractors
Non-tangible rights
2
10 Motors and metal structures
Industrial & agricultural machinery & equipment
Ships
Elevators
3
20 Gas & oil pipelines
Water distribution systems
4
30 Buildings
Bridges
Roads and canals
5
50 Office buildings, Hotels 6


The company may select either the straight line or the accelerated method of depreciation. However, during the period of depreciation, the company may not alter the method of depreciation. Similarly, should the ownership of the asset change during the period of depreciation, the new purchaser may not alter the method of depreciation that was selected by the original owner.

Czech Republic Losses

In the Czech Republic losses can be carried forward for 5 years.
There is carryback of losses for two years up to CZK 30 million.

Czech Republic Consolidated Account

Consolidated tax returns are not allowed in the Czech Republic.

Czech Republic Thin Capitalisation

Financial expenses related to loans from related parties are not tax deductible when the loan to equity ratio exceeds 4:1 (6:1 for banks and insurance companies).

Czech Republic Deduction of Tax at Source

Czech Republic Social Security:
Mandatory social and health insurance payments are:
Employer - 33.8%.
Employee - 11.6%.
Self employed pay mandatory 42.7% for social security and health insurance.

Czech Republic Other Deductions

Tax is deducted at source from the following payments to non-residents:
Dividends-15%/35%.
Royalties-15%/35%.
Interest-15%/35%.
Technical Fees – 15%/35%.

Note:
Payment of dividend between EU companies, subject to conditions, is exempt from withholding tax.



Austria Income Taxes and Tax Laws | Brazil Income Taxes and Tax Laws | Bulgary Income Taxes and Tax Laws | BVI Income Taxes and Tax Laws | Canada Income Taxes and Tax Laws | China Income Taxes and Tax Laws | Croatia Income Taxes and Tax Laws | Cyprus Income Taxes and Tax Laws | Czech R. Income Taxes and Tax Laws | Estonia Income Taxes and Tax Laws | Finland Income Taxes and Tax Laws | France Income Taxes and Tax Laws | Georgia Income Taxes and Tax Laws | Germany Income Taxes and Tax Laws | Greece Income Taxes and Tax Laws | Hong Kong Income Taxes and Tax Laws | Hungary Income Taxes and Tax Laws | India Income Taxes and Tax Laws | Iran Income Taxes and Tax Laws | Ireland Income Taxes and Tax Laws | Israel Income Taxes and Tax Laws | Italy Income Taxes and Tax Laws | Japan Income Taxes and Tax Laws | Latvia Income Taxes and Tax Laws | Libya Income Taxes and Tax Laws | Lithuania Income Taxes and Tax Laws | Malta Income Taxes and Tax Laws | Mexico Income Taxes and Tax Laws | Montenegro Income Taxes and Tax Laws | Netherlands Income Taxes and Tax Laws | Poland Income Taxes and Tax Laws | Portugal Income Taxes and Tax Laws | Romania Income Taxes and Tax Laws | Russia Income Taxes and Tax Laws | Serbia Income Taxes and Tax Laws | Slovakia Income Taxes and Tax Laws | Slovenia Income Taxes and Tax Laws | Spain Income Taxes and Tax Laws | Singapore Income Taxes and Tax Laws | Tunisia Income Taxes and Tax Laws | Turkey Income Taxes and Tax Laws | UAE Income Taxes and Tax Laws | U.K. Income Taxes and Tax Laws | Ukraine Income Taxes and Tax Laws | U.S.A. Income Taxes and Tax Laws