Date de publication : 06-10-1907
The following information are for the sole purpose of providing a general overview of the local taxation of the Corporate tax aspects of the country. In any case, it can not replace a tax advice, or be considered as an official information.
Yes we tax in Czech Republic
Tax treaty between Czech Republic and Sri Lanka is under negotiation.
Tax treaty between Czech Republic and Ghana signed.
Local tax advisors
No specific information on the local tax advisors.
The definition of resident company for tax purposes, corresponds to the definition of the OECD Model Convention.
A company which have its legal registered office in Czech Republic or its effective management & control in Cyprus, is deemed to be a resident for tax purposes.
Corporate Income Tax
The general CIT tax rate is 19%.
Exempt income includes, without limitation:
- Certain capital gains are exempt. This is the case for the capital gains derived from the sale of a participation in a qualifying subsidiary derived by a qualifying mother company resident of Czech Republic.
- Interests on overpaid tax
Carry forward: Yes, 5 years
Carry back: No
Annual tax returns are filed by the company on the basis of a self-assessment system.
The company shall make 4 advance payments (not applicable for small companies).
Whithholding Taxes (payment to foreign companies)
The local tax rates in Czech Republic are the following, subject to the provisions of an applicable double tax treaty, if any.
There is no WHT on the profits paid from a branch to its foreign head office.
General WHT tax rate on dividends is 15%
General WHT tax rate on interest is 15%
General WHT tax rate on Royalties is 15%
General WHT tax rate on management fees is 15%
General WHT tax rate on technical services is 15%
Capital gains are taxed as general income under the regular CIT.
There is certain exceptions for sales of share of a qualified company.
Standard VAT tax rate is 21%
Reduced tax rates are:
- 15% (among others, dairy products, animals, fruit and vegetables, most other foodstuffs, cultural events and social care services (unless exempt), catering services, and certain environmentally friendly items);
- 10% (essential child nutrition, selected pharmaceutical products, books, certain newspapers and magazines, and certain agricultural products)
Zero-rated supplies include, subject to certain conditions:
- exports of goods;
- intra-Community supplies of goods;
- provision of services consisting of work on movable assets returned to a third country;
- transport of goods and services directly related to import and export of goods;
- Passenger transportation.
Exempt services and goods:
- Postal services
- Financial services (except for financial lease)
- Insurance services
- Training and education
Foreign companies which are non-EU resident may claim for a refund of Input VAT on the basis of the principle of reciprocity (in their country a Czech company should have the possibility to obtain same refund).
Foreign companies which are EU resident may claim for a refund of Input VAT on the basis of the 13th EU Directive.
No other specific information on VAT.
Prescription is 3 years.
In certain cases the statute of limitation may be extended to 15 years (in general this is the case for companies which report tax losses).
There is no foreign exchange control in Czech Republic.
Yes. The interests derived from loans between related parties may not be deductible in case where interest exceeds some ratios.
Do not hesitate to share your experience in Czech Republic with us in the comments below. Any comments are welcome !