Profits of legal entities are now taxed at a linear rate of 19 % in the Czech Republic and it is one of the lower rates compared to the European Union. Therefore, the Czech Ministry of Finance proposes to increase the corporate income tax rate from 19 % to 21%. This should bring the Czech corporate income tax closer to the European average. The higher rate will be applied on the income tax which will be declared for the tax period starting after 1.1.2024, e. g. for the corporate income tax return submitted for the year 2024.
Furthermore the Ministry of Finance plans to limit the deductibility of tax expenditures on higher-value vehicles. The purchase of passenger cars is currently favored when the cars are purchased for so-called "business use." This is a tax-deductible expense and cars can be written off as an expense without any material limitation on their purpose or purchase price. The Ministry of Finance now proposes to limit the tax deductibility of the purchase of conventional passenger cars for business purposes to the first CZK 2 million of the car's price.
Another change relates to the tax deductibility of silent wine as a gift of up to CZK 500. Currently, the tax deductibility of the so-called representation expenses is allowed up to CZK 500, provided that other conditions are met. One of these conditions is that the item in question is not subject to excise duty. Therefore especially gifts of tobacco or alcoholic products are not tax deductible even their value is under CZK 500. The only exception is silent wine, which is not subject to this restriction. This should change with the amendment and the wine will be tax non-deductible as well.
Remote work from the Czech Republic has become often: Czech employees work from their home for an employer with the head office in another country. For companies with staff based in the Czech Republic, the key question is whether this location can qualify as a “fixed place of business” and thus as a permanent establishment in the Czech Republic.
The filing deadline for Czech corporate tax returns for 2024 passed in June 2025, and in practice the increase of the corporate tax rate from 19 % to 21 % clearly showed its impact.
If you are considering the question of which country is advantageous from a tax point of view to import goods into the European Union, then you need to consider in particular which country a fiscal representative is required and how VAT is charged on imports into the EU. In both aspects, the Czech Republic is an ideal choice.