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. The higher rate, changes to tax-deductible expenses and stricter audits revealed weak spots in many companies’ accounting – often completely unnecessarily.

How the higher rate affects Czech corporate taxation

The higher Czech corporate income tax rate brings companies mainly:

• higher effective taxation of their profits,
• more focus on correctly distinguishing tax-deductible and non-deductible expenses,
• growing interest from clients in transfer pricing and pricing between related parties.

For many small and mid-sized companies, the first Czech corporate tax return with the new rate showed that even a small accounting mistake can lead to an unnecessarily high tax bill.

Corporate income tax return: recurring mistakes

When preparing the corporate income tax return, similar issues tend to repeat:

• incorrectly set tax depreciation of assets,
• wrong classification of representation / entertainment expenses,
• overlooked links between the Czech Republic VAT return and the corporate tax return,
• missing or incorrect attachments required by the Czech Tax Administration.

You can find official guidelines on the website of the Czech Tax Administration (Finanční správa), but applying them correctly in practice requires experience and a good understanding of Czech accounting rules.

Link between VAT and corporate tax

For Czech corporate taxation and VAT can’t be viewed in isolation. The tax office typically compares:

• turnover in the Czech Republic VAT return with revenues in the accounts,
• input VAT claimed with tax-deductible expenses in the accounts,
• income exempt from Czech corporate tax with exempt supplies reported in the VAT returns, etc.

Any mismatch may trigger questions or an audit. That’s why it is so important to align your bookkeeping, Czech Republic VAT return and corporate tax processes – from Czech Republic VAT registration to the annual tax return.

How the Czech corporate tax rate compares in the region

The increase of the Czech corporate tax rate to 21 % has moved the country closer to the EU average. For orientation:

• Poland – standard corporate income tax rate: 19 %.
• Germany – total corporate tax burden (corporate tax, trade tax, etc.) is usually around 29.9 %.
• Austria – corporate income tax rate: 23 %.
• Slovakia – standard corporate income tax rate: 21 %.
• Hungary – flat corporate income tax rate of 9 %, one of the lowest in the EU.

Looking only at rates, the Czech Republic is neither extremely “high tax” nor a “tax haven”. This makes the correct setup of tax-deductible costs, transfer pricing and the consistency between bookkeeping, Czech Republic VAT returns and Czech corporate tax returns even more important.

Do you need a Czech tax advisor?

Need help with Czech corporate tax? We take care of it! And not only of corporate income tax but also your Czech Republic registration, registration of your permanent establishment registration, regular Czech VAT returns and Czech corporate tax returns, and provide ongoing tax support.

• Fast and clear communication
• Fixed price agreed in advance
• Full representation before the Czech tax authorities

Contact us today and let an experienced Czech tax advisor save you time and stress.