Income tax on rent, worked example, in Czech Republic

Taxation Researcher | July 19, 2019

Non-resident couple´s joint monthly rental income1 €1,500 €6,000 €12,000
Annual Rental Income2 18,000 72,000 144,000
Less Expenses (30%)3 (5,400) (21,429) (21,429)
= Taxable Income 12,600 50,571 122,571
Income Tax 4
Flat rate15% 1,890 7,586 18,386
Income Tax Due €1,890 €7,586 €15,386
Tax Credits
Personal Tax Credit5 887 887 887
Annual Income Tax Due 1,003 6,699 17,499
Tax Due as % of Gross Income 5.57% 9.30% 12.15%
Thanks to:
KPMG Èeská republika, s.r.o. BDO Tax s.r.o

Notes


1 The property is jointly owned by husband and wife.

2 Exchange rate used: 1.00 EUR = 28.00 CZK

3 Income-generating expenses are deductible when calculating the taxable income. A standard deduction of 30% of the gross rent is available to account for income-generating expenses, with a maximum of CZK600,000 (€21,429). Landlords may opt for itemized deduction, with a maximum of CZK600,000 (€21,429).

4 Rental income earned by nonresident individuals is taxed at a flat rate of 15%.

5 Tax credit or personal allowance for 2015 is CZK24,840 (€887).

  

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