Taxation in Czech Republic

 

The double taxation agreements signed by Czech Republic with counties worldwide are meant to protect international companies from paying the taxes twice on incomes. Approximately 80 countries signed double tax treaties with the Czech Republic, and among these, China, Egypt, Belgium, Australia, Croatia, Estonia, Bulgaria, Nigeria, Latvia, Romania, Spain, Portugal, Greece, Serbia, Lithuania, Denmark, Poland, Sri Lanka, Ethiopia, Malta, Austria, Albania, South Africa, Ireland, Singapore, Mexico, Sweden, USA, Thailand, Slovakia, Lebanon, Iceland, Cyprus, Korea, Tunisia, Ukraine, UK, Germany, New Zealand, France, Syria, the UAE, Israel, Japan, Luxembourg, Bahrain, the Netherlands, Macedonia, Philippines, Hungary, Slovenia, Mongolia, Moldova and many more.

 

Branches, subsidiaries and any forms of businesses established in the Czech Republic can benefit from the provisions of the double tax treaties signed with countries worldwide. The royalties, the dividends, the capital gains and other types of incomes are covered by the double tax treaties signed by the Czech Republic, whether generated by international companies established in this country or by natural persons working in the Czech Republic.

 

The ordinary tax credit is one of the methods used for the avoidance of double taxation on incomes and it is the most used method, stipulated by the provisions of the double taxation agreements signed by the Czech Republic. Also, the exemption on incomes with progression is another method mentioned by the DTTs signed with countries worldwide. If you need extra details about the double taxation treaties signed by the Czech Republic, we recommend you get in touch with our lawyers in Prague and ask for legal advice.

 

 

Employers in the Czech Republic are obliged to pay the social security and the health insurance contributions of 34% rate divided into 24% for the social security and 9% rate for the health insurance of employees in the firm.

 

 

Taxation for natural persons living and working in the Czech Republic is not applicable, for instance, to the sale of personal assets like houses, apartments, condominiums, etc., if they own such assets for at least 2 years. The sale of movable properties is also subject to tax exemptions under specific rules which can be explained by one of our Czech attorneys. As for the taxation of personal income, a flat rate of 15% applies to “super gross income”. Also, in the case of high-earning individuals, a solidarity tax of 7% is imposed on the gross income that exceeds the annual social security cap, as stated by the Tax Code in the Czech Republic.

 

Customs duties and other taxes

1. Energy tax – it is imposed on certain types of gas and fuel, plus electricity. This is paid by the final consumer.
2. Real estate tax – property or landowners must pay an annual fee based on the location, area, and uses of such assets.
3. Real estate transfer tax – 4% is the real estate transfer tax in Czech Republic and it is calculated based on the greater price of the property involved in the transaction. Our team can tell you more about the Czech tax.
4. Social security & health insurance – employers in Czech Republic must pay social contributions of 34% of the gross salary of an employee.
5. Payroll taxes – the personal income tax and the solidarity surcharge are paid by employers in Czech Republic.
6. Road tax – this must be paid each year by vehicle owners, including companies with car fleet. Talk to our team about the taxes in Czech Republic.

Are investment funds levied in Czech Republic?

Conditions for taxation for foreigners

 

 

Yes, those interested in optimizing the taxes in the Czech Republic might be interested in varied tax minimization methods available in the country. The costs for company equipment can be deducted under specific rules, and if company owners with credits decide on paying in advance, they can benefit from tax reductions. Also, charitable donations in the Czech Republic are seen as useful tax minimization methods that can be easily implemented. It is good to know that the VAT exemption applies to companies having trading activities in the export sector, a benefit which can be considered a solid and appreciated tax minimization method.

 

Tax minimization tools are at the disposal of both local and international entrepreneurs with companies in the Czech Republic, even if the tax structure of this country is extremely appealing. More details in this matter can be provided by our Czech lawyers who can offer complete legal advice in tax matters.

 

Is the Czech Republic a tax haven?

Payment of taxes in the Czech Republic

International tax payment, in complete safety

 

FAQ about taxation in Czech Republic

 

 

The Czech Republic is for many years a solid recipient for foreign investments and the ideal destination for generating huge incomes in varied industries. The legislation of foreign investments in the Czech Republic offers equality in terms of business rules for both local and foreign investors. The appealing tax system and the labor force are also in the attention of international investors looking for a business in the Czech Republic. You might also find interesting the following statistics and information about companies and investments in this country:

 

 

Foreign investors know how important a country's tax system is, so they can get an idea before setting up a business. As the legislation may seem difficult and different from the country of origin, it is recommended to resort to specialized help offered by a team of lawyers with experience in the field, such as our company.

 

We emphasize that we can provide the necessary legal support to both local and foreign investors in terms of registration and payment of specific fees. Professionalism, efficiency, transparency, and communication are among the attributes of our experts in the field, and the collaboration is sugessted right from the very beginning. We pay attention to every detail in order to offer the optimal solutions to those interested in our legal services as it is important to work together since the registration of the company, in order to allow the start of activities in a relatively short time.

 

Therefore, if you want to register a company in the Czech Republic and you want to know more about the tax system, legislation, and other obligations, do not hesitate to get in touch with us by email or phone and find out details about the services offered and their prices.