Taxes in Czechia

Corporate income tax

Corporate tax19%

Corporate income tax rate of 5% applies to basic investment funds. Pension funds are subject to tax rate of 0%.

VAT

The general VAT in Czechia21%

Reduced rate 15% applies on food, beverage, medical treatments etc. Reduced rate 10% applies on books, infant nutrition etc.

Social security and health insurance

Employee11%
Employer34%

The maximum base for social security contributions amounts to CZK 1,438,992 (approx. EUR 56,123) per year/per employer. If the assessment base exceeds the limit, the amount of income that is above the limit is not subject to social security. When an employee has more than one employer during the year, the limit for social security contributions (25%) is applicable for each employer separately.

Dividend Tax

Dividend Tax15%

Dividends paid to residents and non-residents are subject to 15% withholding tax. However, under the EU parent-subsidiary directive, dividends paid from subsidiary to parent company are exempted from taxation under the following conditions.

Dividends paid from a subsidiary (CZ, EU) to its parent company (CZ, EU) are exempted from taxation, if the parent holds at least a 10% share in the subsidiary for at least 12 uninterrupted months.

Withholding tax of 35% applies when dividends are paid to other jurisdictions than EU/EEA states or states with which the Czech Republic did not conclude a double tax treaty.

Personal income tax – rates

Income Tax15%

Road Tax

Levied on motor vehicles and trailers if registered in the Czech Republic and used for business purposes. Regardless of the purpose, vehicles exceeding 3.5 t are subject to tax always.