Czech Republic - Canada Double Taxation Treaty

The treaty for the avoidance of double taxation between Czech Republic and Canada was signed for the first time in August 1990. Since then, the document was updated once, in May 2001, and it became applicable to legal entities and natural persons, tax residents of the two states, starting with 28th of May 2002. The stipulations of the treaty prescribe the taxes which are imposed by the two contracting states and the conditions in which such taxes are applied. Our team of Czech company incorporation specialists can provide assistance on the main stipulations applicable to Canadian businessmen operating in Czech Republic. 

 

 

Canadian investors who want to invest on the Czech market can benefit from the stipulations of the treaty under several conditions. 

 

According to the Article 2.3, the Canadian authorities will impose to Czech tax residents the income tax (referred to as the Canadian tax), while the Czech authorities will apply the following taxes: 

 

• the tax on income of individuals;

• the tax on income of legal persons. 

 

The Czech taxes are applicable on the national territory of the country; our team of Czech company formation consultants can offer more details in this sense. 

 

 

Income from immovable property (which also includes income obtained from agriculture and forestry activities) obtained by a Canadian investor in Czech Republic can be taxed in this country. 

 

The term includes livestock and equipment from the above mentioned activities, as well as the usufruct of the immovable property. Operations which refer to shipping and aircraft are not included in this category. 

 

The business profits obtained by a Canadian company with activities in Czech Republic are taxed only in Canada. The rule is no longer applicable if the Canadian company is operating on the Czech market through a permanent establishment. If so, the company will be taxed in Czech Republic, but only in respect with the profits obtained here. 

 

According to Article 5, the permanent establishment refers to any type of fixed place of business, such as an office, a branch, a place of management or to a business activity which refers to the exploitation of natural resources. 

 

The term also includes a construction site, but only in the situation in which the operations are carried on for an on-going period longer than twelve months. 

 

We suggest you collaborate with our accountants in Czech Republic and access the services we can provide in this field. Among these, we mention that payroll services are needed, as well as bookkeeping, support for tax registration, preparation of annual financial statements, and more. We can also manage human resources and the preparation of employment contracts for new employees.

 

Investors who are interested in an extensive presentation on the Czech Republic- Canada double taxation agreement can address to our team of Czech company incorporation agents.