Czech Republic: Taxes and Costs
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Rental income tax can be high
Effective Tax Rate on Rental Income |
|||
| Monthly Income | €1,500 | €6,000 | €12,000 |
| Tax Rate | 14.4% | 22.8% | 24.2% |
| Click here to see a worked example | |||
| Source: KPMG BDO Disclaimer | |||
INDIVIDUAL TAXATION
Non-residents are liable to tax only on their income from Czech sources. Spouses with at least one child may opt to be taxed jointly under certain conditions. Non-residents are allowed to avail of tax credits, provided that they earn 90% of their income from Czech sources.
INCOME TAX
Non-resident individuals are taxed on their income from Czech sources. Taxable income is generally an aggregate of all kinds of income, less the allowable expenses.
INCOME TAX RATES |
|
| TAXABLE INCOME, CZK (€) | TAX RATE |
| Up to 121,200 (€4,402) | 12% |
| 121,201 – 218,400 (€7,932) | 19% on band over €4,402 |
| 218,401 – 331,200 (€12,029) | 25% on band over €7,932 |
| Over 331,200 (€12,029) | 32% on all income over €12,029 |
| Source: Global Property Guide | |
Rental Income Tax
Taxable rental income can be computed in two ways:
- Income less actual expenses and deductions;
- Standard deduction of 30% of gross rent in lieu of itemized deduction of actual expenses.
CAPITAL GAINS TAX
Gains on the sale of property in the Czech Republic are generally included in the computation for the aggregate taxable income, with the same rates applied. Capital gains are generally computed as selling price less acquisition costs. Gains on the sale of non-business property are exempt from tax if the owner has held the property for at least 5 years.
CORPORATE TAXATION
INCOME TAX
Corporate income in the Czech Republic is taxed at a rate of 24%. The taxable income of a corporation is generally computed as gross income less income-generating expenses.
Capital Gains Tax
Capital gains are generally included in the computation for the overall income of a corporation and are taxed at the general income tax rate of 24%. Capital gains from the sale of properties that have been in the company’s possession for at least 5 years are exempt from tax.
PROPERTY TAXATION
Real Estate Tax
Non-residents are liable to pay real estate tax for properties owned in the Czech Republic. The tax applicable to residential structures used for business purposes is CZK1 (€0.0363163) per square metre, plus CZK0.75 (€0.0272372) per square metre above the ground floor, multiplied by a coefficient varying from 0.3 to 4.5 depending on which municipality the property is located.
Czech Republic - more data and information
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