Basic personal allowances
In 2016, the annual basic personal allowance can be
claimed in the amount of CZK
24,840 (approx. EUR 910).
Allowance of up to 24,840 CZK (approx. EUR 910) can be
claimed by a resident
taxpayer whose spouse does not have annual taxable
income higher than CZK
68,000 (approx. EUR 2,490). The basic dependent-spouse
allowance doubles in
case of disability of the spouse.
Taxpayers with disability may apply an allowance from
CZK 2,520 (approx. EUR 90)
to CZK 16,140 (approx. EUR 590), depending on the extent
of the disability.
An allowance for students is CZK 4,020 (approx. EUR 150)
and can be applied up to
26 years of age.
Resident taxpayers are entitled to a tax credit for each
child living in the same
household with him. The amount depends on the number of
children. Annual tax
credit is CZK 13,404 (approx. EUR 490) for the first,
CZK 15,804 (approx. EUR 580)
for the second and CZK 17,004 (approx. EUR 620)1
for any other.
All the allowances and credits mentioned above are
annual and can be applied for
any resident of EU/EEC, if the income from the Czech
Republic is at least 90% of
overall taxpayer?s income.
Corporate income tax (?CIT?) ? rates
Corporate income tax is levied at a general rate of 19%.
Corporate income tax rate of 5 % applies to basic investment
funds. Pension funds
are subject to tax rate of 0 %.
Corporate income tax general information
A company is treated as resident if it has its legal
seat or place of
effective management in the Czech Republic.
Taxable income - Resident companies are taxable on their
The taxable income is calculated on the basis of the accounting
to Czech accounting regulations and is adjusted for several
items for tax purposes
as described in the tax law. Non-resident companies are taxed
only from Czech
The calendar year or the fiscal year.
Tax returns and assessment
The taxpayer has the obligation to
tax due in the corporate income tax return (self-assessment).
The time-limit for
filing the return is generally three months. If the CIT return
is filed by a tax advisor
or the taxpayer is subject to a statutory audit, the time-limit
for the submission of
the CIT return is six months.
Advance payments have to be paid
semi-annually, if the last
known tax liability is between CZK 30,000 ? 150,000 (approx. EUR
1,100 ? 5,480).
Then the advance payment is 40% of the tax liability. If the
last known tax liability
is higher than CZK 150,000 (approx. EUR 5,480), the advance
payment is ? of the
previous tax liability and is paid quarterly.
As a general rule, expenses incurred in
obtaining, ensuring and
maintaining taxable income are fully tax deductible, unless they
are listed as
non-deductible items or items which are deductible only up to a
limit set by the law.
Deductions on research and development
Expenses on research
development projects can be deducted from tax base up to 100%,
resp. 110% of
the expense. In fact, research and development costs are claimed
the cost of research and development project remains in the
calculation of the tax
base. Deduction can be made for up to 3 years.
Education tax deduction
Companies can obtain tax deductions in
A deduction for assets acquired for professional education, can
be made twice -
first by the depreciation of asset which decreases the tax base,
second by the
deduction of up to 110 % of value of asset in the year of
providing professional education can deduct CZK 200 (approx. EUR
7.30) per hour
of educational activity, which is the second form of deduction.
Carry forward of losses
Tax losses derived after 1993 may be
for 5 tax years.
Investment incentives are available to both Czech and foreign
investors for the
following supported areas:
- Technology centers
-Business support services centers - shared-services centers, software development
centers and high-technology repair centers, call centers
and data centers.
While meeting the conditions, investments incentives can be
provided in the
- Income tax relief for up to 10 years
- Financial support for creation of new jobs
- Financial support for training and retraining new employees
- Financial support in the case of strategic investments in
in technology centres
- Transfer of public land at a favourable price
- Real estate tax exemption for up to 5 years
Value added tax - rates
21% Reduced rate 15% applies on food, beverage,
treatments etc. Reduced rate 10% applies on books, infant
Value added tax ? general information
The VAT rules are based on the principles of the
2006/112/EC on the Common System of Value Added Tax. The
implemented in the Czech law by Act No 235/2004 Coll., on Value
Legal entities and individuals that carry on an
- the supply of goods and services in relation with an economic
the territory of the Czech Republic ;
- the intra-Community acquisition of goods for consideration
within the territory
of the Czech Republic from another EU Member State; and
- the importation of goods into the Czech Republic
Total consideration charged for the supply,
excluding VAT but
including any excise duties or other taxes and fees.
Month or quarter, based on turnover for 12 previous
calendar months. Compulsory tax period for newly registered VAT
Periodical VAT returns (monthly or quarterly,
by the 25th day of
the following month). The amount of VAT liability consists of
the VAT due on supply
of goods and services carried out by the entrepreneur less input
VAT of the same
In addition, taxable person carrying out intra-Community
supplies or supplying
services according to the basic rule for ?business to business?
services has to file an
EC Sales List (that shows the VAT identification numbers of his