The Czech tax system primarily differentiates between direct and indirect taxes. Both of these groups consist of:

1) Direct taxes

• Personal income tax (PIT) / payroll tax – tax rate amounts to 15 % (the effective tax rate amount to 21 %)
• Corporate income tax (CIT) – tax rate which is applied on taxable profit amounts to 19 % (it should be increased to 21 % in 2024)
• Road tax – depends upon the engine cylinder capacity or the maximum permitted weight
• Real estate and Real estate transfer tax (4 %)

2) Indirect taxes

• Value added tax (VAT) - tax rates amount to 15 and 21 % (the VAT rates should change as of 1.1.2024) 
• Excise duties
• Tax on natural gas and several other types of gases
• Tax on solid fuels
• Tax on electricity

The most important taxes from the above mentioned list are in the term of tax collection value added tax, excise duties, personal and corporate income tax. Nevertheless, social and health security contributions comprise the highest state revenue.

The Czech Republic introduces an extraordinary windfall tax as of 1 January 2023. The windfall tax will be levied on excess profits for a period of years 2023 - 2025 and will apply to companies in the sectors of energy production and trade, banking, oil industry, mining and fossil fuel processing. The windfall tax rate is 60 % of the excess profits that will result from the differences between the annual tax bases in the period 2023 - 2025 and the average of the tax bases increased by 20 % in the last four years (i.e. 2018 - 2021).

Tax advisors in the Czech Republic

It is a common practice to have a tax advisor in the Czech Republic who takes care for all tax issues on the behalf of a client such as:

• tax registration - incl. VAT registration,
• tax returns - incl. corporate tax return, VAT return, import VAT,
• accounting,
• communication with the Czech tax office,
• other tax advisory.

Yourtaxes.cz - a registered tax advisor in the Czech Republic - is more than happy to assist you with all these issues. Our team has only experienced experts who have years of practice in the tax advisory in the Czech Republic. All of them are members of the Czech Chamber of Tax Advisors. We are able to provide you with high quality services for very competitive prices! Just contact us and we can send you a tailor-made offer.

Yourtaxes.cz - Your tax advisor in the Czech Republic