Czech Republic

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TAXES - ACCOUNTING

 

 

Corporate tax

Tax rate for resident companies

24%
Investment funds, mutual funds and pension funds are subjected to tax at a rate of 15%.

   
Tax rate on long-term capital gains Capital gains are taxed at the normal corporate income tax rate: 26%.
   
System governing groups of companies and dividends paid by subsidiaries to their parent companies Dividends paid to residents and non-residents are subject to a final withholding tax at a rate of 15%.
   
Tax rate on branches Branch profits tax rate is 26% in the Czech Republic.




Income tax

Fiscal year The fiscal year begins on January 1st and ends on December 31st of the same year.
   
Income tax rate Tax schedule 2003:

Income Tax rate (%)
0–109,200
15
109,201–218,400
20
218,401–331,200
25
331,201 and over
32
   
Tax deductions or other allowances In Czech Republic, taxpayers benefit from various deductions:
- A basic dejection of 32 040 CZK
- A deduction of 18 000 CZK for every child
- A deduction of 18 240 CZK for couples with a salary under or equal to 32 040 CZK.
- A deduction for ill or disabled persons.
- Deduction in case of donation to charitable organizations.
- Non-residents only have the right to a fixed deduction of 32 040 CZK.



VAT rates

Standard rates 19%
   
Reduced rates Reduced rate is 5% on books, pharmaceuticals products, essential foodstuffs and paper-products. Exported goods are exempt from tax.



Other important taxes


Name of tax
Rate
Succession and donation  
1% to 5%  
Rights of transfer in return for remuneration on transfer of buildings  
5%  


 

Accounting

Introduction
Czech accounting rules are determined by the Ministry of Finance.


General accounting principles
The balance sheet is presented into accounts with liabilities composed of constant capital and debts, because there is a distinction between long and short-term debts.
The profit and loss account gives priority to the repository of the global production and lets the choice of the cost - classification by nature.

Obligations and publications
Companies have to publish a balance sheet, a profit and loss account and annexes.

Certification and auditing
The external control of accounts must be given to a body of auditors chosen by the company.

Professionals and representative organizations
Accountants associations have some difficulties to get organized, because of the importance of the State in the accounting system.



Useful links
For further information, please check the tax report edited by CzechInvest.

Last modified in 2006 - ongoing update
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