What taxes are due in the Czech Republic? Experts` consultations

What taxes are due in the Czech Republic for individuals and legal entities: special aspects of the fiscal system, deductions to be charged from the country population, payments to be made by companies, experts` services.
What taxes shall be paid by foreigners, individuals and legal entities in the Czech Republic?
The Czech Republic is distinguished for its loyal tax legislation. That is why lots of foreign entrepreneurs would be willing to transfer their businesses here. However, you should thoroughly study in detail which taxes are due for foreigners and citizens of the country in the Czech Republic according to the fiscal system.
What every should be aware of
Among European Union countries, tax liabilities in the Czech Republic are among the lowest for the population and the companies. At the same time, there is a long list of preferences that allow significantly decreasing the costs on this item of expenses.

When making calculations, the regulatory bodies employ the residence principle:

  • Residents of the country shall pay contributions from all the incomes regardless of the source and their location;
  • Non-residents shall make payments only from the funds accumulated within the country.

This rule shall apply for companies as well.
Liabilities of a legal entity
The income tax in the Czech Republic is the same for both the natives and the foreigners. It shall be charged as per the fixed rate of 15%. The base for such accruals shall be financial contributions, such as:

  • salary
  • dividends;
  • deposits income and so on

For individuals with the salary less than 10 000 korunas per month, the rate shall be 0%.

It is worth mentioning that the income tax shall be charged only for the amount exceeding 10 000 korunas. This amount shall be deemed as the minimum value exempt from any deductions to be paid to the state.

The following shall be entitled to have some preferences:

  • students working part-time;
  • low-income families;
  • parents raising a physically disabled child;
  • multi-member families;
  • pensioner and so on.

In addition to the above mentioned, both the Czech and the foreigners shall make the following payments:

  • joint payments – 7% of the income exceeding 1 200 000 korunas per year;
  • health insurance – 13.5%;
  • social – 31.5%;
  • inheritance – 0.5-40%;
  • transport – to be calculated individually depending on the type of the vehicle engine;
  • for radio and television – about 180 korunas.
Five years ago, payments to the budget when making a gift were canceled in the country.

Real estate tax shall be paid by the buyer; it shall be 4% of the transaction amount. If housing accommodations are purchased at the primary market and five years have not passed since the object was commissioned, then a zero rate shall be applied.

Deductions to be paid as a result of selling an apartment, a house or commercial property shall be calculated as per the formula– ((2 koruna*per every square meter) *1.22)*local coefficient.
Deductions to be paid by companies
The percentage to ab accrued for a company income shall be determined according to the form of the business entity:

  • funds (investment funds, interests funds, and pension funds) – 5%;
  • for legal entities of other types and forms – 19%.

Private entrepreneurs can pay part of their income as per personal income tax or choose any other system – "income minus costs".

Additionally, business entities shall pay:

  • VAT – 10-21%;
  • Excuse tax – the rate may be various.

If you still have any questions on taxes in the Czech Republic, please contact our specialists. They will prepare summary of information for you within the shortest time possible free of charge.

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