Taxes - Czech Republic

Updated 06/2012

Legal requirements

The area of taxation is generally governed by the Tax Code.

Tax Code

Taxes are either direct and depend on income, or indirect and relate to consumption (the purchase of goods and services).

Tax system

There are nine different tax categories:

Income tax - This represents the main tax duty. It is divided into income tax on natural persons (15%) and income tax on legal entities (19%).
Detailed information on income tax
Value added tax (VAT) - VAT is an indirect tax applied to most taxable supplies in the Czech Republic. There are two different rates: a basic rate of 20% and a discounted rate of 14%.
Detailed information on value added tax
Further information on value added tax
excise duty - this tax is applied to some specific types of goods (mineral oils, spirit, beer, wine, and tobacco products).
duty on mineral oils
duty on spirits
duty on beer
duty on wine and intermediate products
duty on tobacco products
Detailed information on excise duty
Road tax - this applies only to vehicles used or intended for business. Tax rates are defined as fixed annual amounts.
Detailed information on road tax

Property tax - applied to land and buildings. In the case of land, the tax base is either the area or the value of the land. The tax rate depends on the quality, location and use of the land. In the case of bulidings, the tax base is the built-up area, and the rate depends on the type and use of the building. The tax period is the calendar year.

Detailed information on property tax
Real estate transfer tax - this applies when transferring real estate for a fee. The unified tax rate is defined as 3% of the price of the real estate.
Detailed information on property transfer tax
inheritance tax - applies to assets acquired through inheritance. Certain groups are not subject to inheritance tax
Detailed information on inheritance tax
gift tax - a one-off tax which applies to the payment-free acquisition of assets. Certain groups are exempt from gift tax.
Detailed information on gift tax
environmental tax - this is a tax on electricity, natural gas and solid fuels
Detailed information on environmental tax

Each type of tax is defined in a specific law. The administration and collection of the individual taxes is the responsibility of the Ministry of Finance of the Czech Republic and its subordinate administrative bodies, particularly the local tax offices.

Ministry of Finance of the Czech Republic
Address list of financial authorities
Overview of tax legislation

Administrative procedures

Tax registration

Under section 125 Paragraph 1 of the Tax Code, a tax subject who obtains a permit or acquires an authorisation to perform an activity that is a source of taxable income or the products of which are taxable, shall apply for registraion with the relevant tax office within 30 days. This time period starts on the day after the day on which the permit or authorisation enters into effect. The registration requirement thus applies to persons who have obtained, for example, a trade licence, concession, entry in the Commercial Register, or certificate of entry in the Chamber of Auditors, Lawyers or Tax Consultants.

Value added tax is regulated by the Value Added Tax Act. Under this Act, persons must pay the tax if their turnover exceeds CZK 1,000,000. Such persons (tax payers) must submit an application for registration within 15 days of the end of the calendar month in which this amount was exceeded.

Registration for value added tax
Registration form for value added tax
Registration for individual taxes
Tax forms, including registration forms

Submitting your tax return

Tax returns may be submitted on the traditional printed form either at the relevant local financial office, or in electronic form in the Czech Tax Authority's e-submission (ESU) application.

Electronic submission to the ax authority
Address list of local financial authorities

Tax return forms:

Income tax on natural persons
Income tax on legal persons
Value added tax
Road tax
Property tax
Inheritance tax
Gift tax
Property transfer tax
Environmental tax
Czech Tax Authority
Tax authority - online services

Resources

The following governmental and non-governmental web portals offer further information and useful services on accounting and tax issues.

BusinessInfo.cz - official portal for business and export
Public Administration Portal of the Czech Republic

Check also the legislation on this topic in:

Taxes - Czech Republic