Taxes - Czech Republic
Tax issues are generally regulated under the Act on Administration of Taxes and Fees.
Taxes are either direct and depend on income, or indirect and relate to consumption (the purchase of goods and services).
There are nine different tax categories:
- income tax - this represents the main tax obligation. It is divided into income tax on natural persons (15%) and income tax on legal entities (19%).
- 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 10%.
- excise duty - this tax is applied to some specific types of goods (mineral oils, spirit, beer, wine, and tobacco products).
- Road tax - this applies only to vehicles used for business activities. Tax rates are defined as fixed annual amounts.
- Real estate tax - this generally applies to land and buildings. There are, however, many exceptions. Land tax depends on either the plot area or the price of the land as well as the usage of the land and its location. Tax on buildings depends on the size of the built-up area, what the building is used for and its location. Generally, the larger the town/city, the higher the rate.
Detailed information on real estate tax
- Real estate transfer tax - this applies when transferring real estate for a payment. The unified tax rate is defined as 3% of the price of the real estate.
- inheritance tax - applies to assets acquired through inheritance. Certain groups are not subject to inheritance tax
- gift tax - a one-off tax which applies to the payment-free acquisition of assets. Certain groups are not subject to gift tax.
- environmental tax - this is a tax on electricity, natural gas and solid fuels
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.
Self-employed business owners must register with the local tax administration body within 30 days of obtaining their business licence.
The obligation to register is set out in the Act on Administration of Taxes and Fees.
Value added tax is governed by in the Act on Value Added Tax. 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.
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.
Tax return forms:
The following governmental and non-governmental web portals offer further information and useful services on accounting and tax issues.
Check also the legislation on this topic in: