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- Wages and other income from employment activities;
- Income from entrepreneurial activities;
- Income from property, such as from renting out real estate;
- Income from capital, such as from selling securities;
- Income from other sources, such as from pensions, social benefits, and compensations.
PIT is paid monthly or quarterly. The tax amount is calculated as the product of the tax rate and taxable income.
Businesses in the Czech Republic pay Corporate Income Tax (CIT). The basic business tax rate in the Czech Republic is 19%, but for companies engaged in certain types of activities, the rate may be reduced to 10% or 5%.
- Income from the sale of goods and services;
- Income from financial operations;
- Investment income;
- Other income.
CIT is paid quarterly. The tax amount in the Czech Republic is determined as the product of the tax rate and taxable income.
Businesses in the Czech Republic also pay Value Added Tax (VAT). The standard VAT rate is 21%, but for some goods and services, the rate may be reduced to 15% or 10%.
VAT is paid monthly or quarterly. The tax amount is determined as the product of the tax rate and the amount of taxable transactions.
The Czech tax system is quite fair and transparent. The rates are relatively low, and tax administration is efficient. This contributes to economic development and enhances the welfare of the population.
How Should a Non-Resident Pay Taxes in the Czech Republic?
For non-residents in the Czech Republic, special rules take into account their status when calculating taxes and grant foreign citizens a specific status.
Non-residents are required to pay tax in the Czech Republic only on income earned from sources within the country. This means that income earned abroad may be exempt from taxation.
Some categories of non-resident income may benefit from a reduced tax rate compared to the rate for residents. For example, individuals who invest money in projects, businesses, or real estate in the Czech Republic, as well as employees of international companies.
Non-residents may be granted certain simplifications in filing tax returns, especially in cases where their financial transactions are limited.
These rules create a transparent and predictable tax climate for foreign economic entities in the Czech Republic. Your business can advantageously utilize these features to ensure stable financial development.
