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Ready to start a business in the Czech Republic? Our local tax experts have summarised 10 key facts you should consider when it comes to the Czech tax system. For a more complex overview, we recommend to take a look on our Tax guideline for 2023.
5% is the rate of basic investment funds
0% is the rate of pension funds
Income from sale of participation in a subsidiary (CZ or another EU Member State resident).
Dividends and income from sale of participation in a subsidiary if the subsidiary is a non-EU resident from a “double tax treaty” country and is subject to corporate income tax which is not lower than 12%.
35% for payment outside EU/EEA
Note: Dividends paid by a subsidiary to parent company, that holds 10% share uninterrupted in the past 12 months, are exempt from taxation. Interest and Royalties could be also a tax exempt under the implemented EU directive.
15% for selected types of goods: food, non-alcoholic beverage, plants, special healthcare products, pharmaceutical products
10% for selected types of goods and services: infant nutrition, drugs and vaccines, books, water and sewer rates, public transportation, hotel accommodation, catering, entry to cultural and sport events, minor repairs, hairdressing services
15% is the rate of personal income tax for a tax base up to 48 multiple of the average wage
23% is the rate of personal income tax for a tax base exceeding the limit
For 2023 the limit is CZK 1,935,552 or EUR 80,648 per year
24.8% for social security, applied up to annual cap
9% for health insurance
6.5% for social security, applied up to annual cap
4.5% for health insurance
Losses generated from independent activities and rental activities may be set off against all types of income, except the employment income.
2 years: standard carry-back period, max. amount of CZK 30 million
5 years: standard carry-forward period
Sale of house or flat, if the seller has a permanent residence for min. 2 years before the sale
Sale of immovable asset, when the period of ownership exceeded 5/10 years before the sale
Sale of movable property, with exceptions
Sale of a share in a LLC, if the share was held for at least 5 years before the sale
Sale of securities, if held for min. 3 years before sale or if total income is less than CZK 100,000, i.e. EUR 4,160
Pensions up to CZK 622,800, i.e. EUR 25,950