Business taxes in the Czech Republic

The consumption taxes in the Czech Republic

The nature of the tax: Tax (VAT)
Tax rate: 20%
The reduced rate: 10% VAT on food, books, special products for health.Other consumption taxes: Excise duties include ( tobacco, petroleum products, beer, wine and liquor), they are applied depending on the type and quantity of product. They are payable within 10 days after the announcement by Customs. An energy tax for the supply of electricity, natural gas, other gas and solid fuels came into validation in January 2008.

The corporate taxes

Tax rate
Corporate tax: 19%
Investment income and pension funds: Reduced rate of 5%

The tax rate for foreign companies:
All Czech residents are subject to tax on their worldwide income and capital gains, while taxes for non-residents are based onlyon income derived from Czech sources.
Tax residence to a legal entity in the Czech Republic is the location of its head or the location of its management.

The taxation of capital gains:
Capital gains are taxed at normal income tax of corporations.

Deductions and tax credits:
Expenses tax deductible are the same as in many other countries if they are incurred to generate, maintain or provide a taxable income: taking account of depreciation on property and equipment, materials and purchased services, salaries, contributions to social security and other health insurance.

Tax deductible items: donations to charity, cost of research and development, accumulated tax losses carried forward from the previous year, tax relief.

Other corporate taxes:
Withholding tax, value added tax, property tax, tax on operators of photovoltaic panels.

Taxes on personal income

Personal Income Tax:
A flat rate of 15%

Deductions and tax credits:
Employee contributions to retirement pensions, an annual exemption to the taxpayer exemption housewife, disability allowance, students in high school and college, etc.. Deductions, interest on mortgages are available, as well as life insurance and corporate gifts.

Special schemes for expatriates:
Taxable income includes income from self-employment, including benefits (eg. For housing), allowances, use of a company car for private purposes, …). Are also considered income from business activities, income from capital, leasing and other sources.