Tax authorities
Department of Taxation
Ministry of Finance, Letenska 15, 118 10 Prague 1
Tel: +420 2 5704 1111
Fax: +420 2 5704 2788
Website: www.mfcr.cz
Tax rates at a glance
(As of September 2009)
| Corporate income tax rate (%) |
20(a)(b) |
| Capital gains tax rate (%) |
0/20(a)(c) |
| Branch tax rate (%) |
20(a) |
Withholding tax (%) |
(d) |
| Dividends |
0/15(e) |
| Interest |
0/15(f) |
| Royalties |
15(g) |
| Rental income from leases |
15(h) |
Net operating losses (years) |
|
| Carryback |
0 |
| Carryforward |
5(i) |
(a) The 20% rate applies for 2009. The rate is reduced to 19% for 2010 and future years.
(b) Investment funds, mutual funds and pension funds are subject to tax at a rate of 5%.
(c) Capital gains derived by Czech or EU parent companies on transfers of shares in their subsidiaries are exempt from tax if certain conditions are satisfied.
(d) The rates may be reduced by applicable tax treaties.
(e) Dividends are subject to a final withholding tax at a rate of 15%. Under the principles of the EU Parent-Subsidiary Directive (No 90/435/EEC), dividends paid by Czech companies to parent companies (as defined in the directive) located in EU/EFTA countries (except for Liechtenstein) are exempt from withholding tax if the parent company maintains a holding of at least 10% of the distributing company for an uninterrupted period of at least one year. Dividend distributions between two Czech companies are exempt from tax under similar conditions.
(f) Interest payments are subject to withholding tax at a rate of 15%. Under the principles of the EU Directive 2003/49/EC, interest paid by Czech companies to related companies (as defined in the directive) located in EU/EFTA countries (except for Liechtenstein) is exempt from withholding tax if certain additional conditions are met.
(g) This is a final withholding tax that applies to nonresidents. Royalties paid by Czech companies to companies located in EU/EFTA countries (except for Liechtenstein) will be exempt from tax, effective from January 1 2011.
(h) The 5% withholding tax is imposed on gross rent if the lessee purchases the leased asset at the end of the lease term and if certain other conditions are met. Other rental payments are subject to a 15% withholding tax.
(i) Losses incurred in 2003 and earlier years may be carried forward for seven years. Losses incurred in 2004 and subsequent years may be carried forward for five years.
Source: Ernst & Young