GSL / International Taxation / Czech Republic

Czech Republic tax system - taxation of Czech companies and individuals: VAT, income tax and capital gains. Tax treaties of the Czech Republic.

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Taxes of Czechia

Сorporate tax
Capital gains tax
15% (dividend), 15% (interest), 15%(royalty)
Withholding tax
Exchange control

Basic taxes (briefly)

Personal tax
15 and 23%
Corporate tax (in detail)
Income tax is paid at a rate of 21% for tax periods beginning in 2024 (19% for previous tax periods)
Capital gains tax. Details
Included in the income tax base
VAT. Details
The standard VAT rate is 21%. Reduced rates of 12% and 0% apply to some goods and services
Other taxes
Social contributions, Real estate tax
Government fee
Stamp duty

Personal income tax

Czech tax residents pay tax on their worldwide income, non-residents – on income from Czech sources.

The income tax is paid at 15% on income up to CZK 1 500 000 and at 23% on the excess.

Certain types of income from foreign sources, such as dividends and interest, are included in a separate tax base and taxed at the rate of 15%. Dividends and interest received by residents from Czech companies are subject to 15% withholding tax.

Gains from the sale of assets are included in the general tax base. However, there are various exemptions. Thus, income from the sale of securities is tax exempt if securities have been held for at least 3 years, or if the income does not exceed CZK 100 000; income from the sale of participation in limited liability companies is tax exempt provided the participation has been held for at least 5 years; income from the sale of a house or an apartment is tax exempt if the property has been owned for at least 2 years, etc. Gains from the sale of assets used for business purposes are subject to tax.

Corporate income tax

Czech companies pay corporate income tax on their worldwide income, while foreign companies – on income from Czech sources.

The income tax rate is 21% for tax years beginning in 2024 (19% for previous tax years) and applies to all business income, including capital gains on the sale of shares (unless exempt under the regime exemption from participation).

Dividend income is subject to tax at the rate of 15%.

Gains from the sale of assets are included in the general tax base.

Gains from the sale of shares and dividends are tax exempt if the Czech parent company has held at least 10% of shares of a Czech subsidiary or of an EU company for at least 12 months, and both companies are taxable, and certain other conditions are met.

Gains from the sale of shares in and dividends from non-EU companies are tax exempt if there is a double tax treaty with the respective country, the subsidiary is taxed at least at 12%, and the above criteria for the size of participation and holding period are met.

CFC rules

A foreign company is considered a controlled foreign company (CFC) if more than 50% of its capital or voting rights or rights to profits is held, directly or indirectly, solely or jointly with related parties, by a Czech company, and if the foreign company does not conduct genuine economic activity and is taxed at a rate of less than 50% of the tax that would otherwise be payable in the Czech Republic.

In this case, the CFC’s non-distributed profit from passive income is included in the tax base of the controlling Czech entity. For these purposes, passive income includes interest, dividends, royalties, lease income, capital gains from the sale of shares, income from banking and insurance activities and other financial services, income from the sale of goods and provision of services in transactions with related parties with little value added.

Withholding tax

Payment of dividends, interest and royalties is subject to 15% withholding tax.

Dividends, interest, and royalties paid to non-DTT (Double Tax Treaty) or non-TIEA (Tax Information Exchange Treaty) countries are taxed at 35%.

Tax rates are reduceable under double tax treaties and EU directives.


The standard VAT rate is 21%.

Some goods are taxed at a rate of 12% from January 1, 2024.

Social security contributions

Employers pay social contributions from employee remuneration at a rate of 33% (20% for pension insurance and 13% for medical insurance). Employers also pay unemployment insurance contributions at a rate of 0,8%, employees - 1,6%.

Employees born in 1983 and younger pay contributions to compulsory pension savings insurance at a rate of 2%. For more senior employees, such contributions are voluntary.

Immovable property tax

Immovable property tax is levied on land and buildings.

The rates are set by local authorities and vary greatly depending on the location and type of the property.

International tax treaties

The Czech Republic has concluded 94 Double Tax Treaties (DTC) and 1 Tax Information Exchange Agreement (TIEA) with the following jurisdictions:

94 DTCs: Albania, Armenia, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Bosnia and Herzegovina, Botswana, Brazil, Bulgaria, Canada, Chile, China, Colombia, Croatia, Cyprus, Denmark, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Ghana, Great Britain, Greece, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Latvia, Lebanon, Liechtenstein, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Mexico, Moldova, Mongolia, Morocco, Netherlands, New Zealand, Nigeria, Norway, Pakistan, Panama, Philippines, Poland, Portugal, Republic of Korea, Romania, Russian Federation, San Marino, Saudi Arabia, Serbia, Senegal, Singapore, Spain, Slovakia, Slovenia, South Africa, Sri Lanka, Sweden, Switzerland, Tajikistan, Thailand, Tunisia, Turkey, Turkmenistan, UAE, Ukraine, USA, Uzbekistan, Venezuela, Vietnam.

1 TIEA: British Virgin Islands.

The Czech Republic has also signed and ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The Multilateral Convention entered into force for the Czech Republic on September 1, 2020.

Exchange control

Foreign exchange transactions can generally be made without restrictions.

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