Paying Taxes in Czech Republic

 

Companies registered in Czech Republic are required to pay several taxes at the local authorities. The taxes are due at specific periods of the year and at certain rates, as prescribed by the national legislation. Businessmen interested in setting up a company in Czech Republic should be familiar with the rates imposed here, but also with the conditions that have to be met when paying taxes in Prague.

 

Our team of Czech company formation agents can offer an in-depth presentation on the procedures referring to corporate taxation. Talk to us about Czech Republic tax rates.

 

 

Businessmen setting up a Czech company should know that all the businesses established here are required to pay the corporate tax, which is a tax applicable on the profits of the company. The tax is also paid for the profits of the branches of foreign companies with operations on the Czech market. 

 

Companies set up as partnerships are also imposed with a corporate tax, but the taxation is performed in accordance with the profit shares of the partners. 

 

Businesses incorporated in Czech Republic operating on foreign markets are taxed on their derived income created on those foreign markets, while foreign companies with activities in Czech Republic are imposed with the corporate tax only for the profits incurred on the Czech market. 

 

At the moment, the standard corporate tax rate is established at 19%; our Czech company incorporation agents can offer more details about taxes in Czech Republic.

 

Our accountants in Czech Republic can offer assistance and a wide range of services for your company. Bookkeeping, audits, annual financial statements, tax registration, payroll and debt monitoring are at your disposal. You can also opt for risk assessment and evaluation if you want to find out ahead of time what risks your business may be exposed to. As such, you can contact us whenever you need these types of services for your firm.

 

 

All companies performing business activities in Czech Republic are imposed with the value added tax (VAT), which is imposed for the goods and services traded on the local market. 

 

The standard VAT rate is established at 21%, while the reduced VAT is applicable at the rates of 15% for specific supplies, and 10% for certain medicine, newspapers, books and supply of heat. Czech Republic also offers a VAT exemption for several services, as follows: 

 

 

Personal income tax - Czech Republic tax rates

• • 15% personal income tax rate (PIT) for threshold above CZK 1,867,728.
• • 23% personal income tax rate for exceeding the threshold mentioned above.

Taxation on employment income – Taxes in Prague

• • 6.5% is social security paid by the employee.
• • 4.5% is the health contribution, paid by the employee.
• • In the case of employers, they must pay social security of 24.8%, as well as a health contribution of 9%.

Other Czech Republic tax rates

• • Property tax - is paid annually and is calculated according to the location, utility, and size of the real estate.
• • Inheritance and gift tax - Progressive taxation is applied, but there are also exemptions.
• • Net wealth tax – The Czech Republic does not impose a net wealth tax.
• • Real estate acquisition tax - Until 2020, this was 4%, but the law in this sense was abolished, with retroactive effect.
• • Local income tax – The Czech Republic does not impose such a tax.
• • Capital gains tax - does not apply to his property, with certain exceptions related to the ownership of the property for a certain period of time.
• • Withholding tax – A 15% tax is applied for income from interests or savings of resident persons in Czech Republic.

Average salaries in the Czech Republic

Businessmen interested in receiving more details about taxation in Czech Republic imposed to corporate bodies can contact our team of Czech company formation agents for an in-depth presentation on this matter.  We can tell you more about taxes in Czech Republic.