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Measure Name
Date when measure came into force
Changes in PIT taxation 2013/01/01
Incorporation of gift and inheritance tax 2014/03/01
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Generic Tax Name Personal income tax
Tax name in the national language Daň z příjmů fyzických osob
Tax name in English Personal income tax
Member State CZ-Czech Republic
Tax in force since 1993/01/01
If abolished, date on which the tax ceases to apply
Business version date 2015/01/01
Version date 2015/02/17
This file was last updated on

Type of tax
Direct taxes Personal income tax
Corporate income tax
Other

Indirect taxes VAT
Excise duty (EU harmonised)
Alcoholic beverages
Energy products and electricity
Manufactured tobacco
Other

Social security contribution Employers
Employees
Other
 
Legal base

Act No. 586/1992 Coll., on Income Taxes,

latest amendments No. 209/1997, 210/1997, 227/1997, 111/1998, 149/1998, 168/1998, 333/1998, 63/1999, 129/1999, 144/1999, 170/1999, 225/1999,

by Constitutional Court Finding No. 3/2000, 17/2000, 27/2000, 72/2000, 100/2000, 103/2000, 121/2000, 132/2000, 241/2000, 340/2000, 492/2000, 117/2001,120/2001, 239/2001, 453/2001, 483/2001, 50/2002, 128/2002, 198/2002, 210/2002, 260/2002

by Constitutional Court Finding No. 236/2011, 308/2002,  575/2002, 162/2003, 362/2003, 438/2003, 19/2004, 47/2004, 49/2004, 257/2004, 280/2004, 359/2004, 360/2004, 436/2004, 562/2004, 628/2004, 669/2004, 676/2004, 179/2005, 217/2005, 342/2005, 357/2005, 441/2005, 530/2005, 545/2005, 552/2005, 56/2006, 57/2006, 109/2006, 112/2006, 179/2006, 189/2006, 203/2006, 223/2006, 245/2006, 264/2006, 267/2006, 29/2007, 67/2007, 159/2007, 261/2007, 296/2007, 362/2007, 126/2008, 306/2008, 482/2008, 2/2009, 87/2009, 216/2009, 221/2009, 227/2009, 281/2009, 289/2009, 303/2009, 304/2009, 326/2009, 362/2009, 199/2010, 346/2010, 348/2010

by Constitutional Court Finding No. 119/2011, 73/2011, 188/2011, 329/2011, 353/2011, 355/2011,370/2011, 375/2011, 420/2011, 428/2011, 458/2011, 466/2011, 470/2011, 192/2012, 399/2012, 401/2012, 403/2012, 428/2012, 500/2012, 503/2012, 44/2013, 80/2013, 105/2013, 160/2013, 215/2013, 241/2013, 344/2013,

by Constitutional Court Finding No. 162/2014, 247/2014, 267/2014, 332/2014  Coll.

 
Who sets
The tax rate is set by




The tax base is set by




The reliefs are set by




Comments
 
Beneficiary





Comments

As concerned beneficiaries of revenue from tax collection: 

Central government:

  • Revenue from withholding tax - approx. 68% of total receipts.
  • Revenue from tax on wages and salaries - approx. 69% of total receipts.
  • Revenue from tax returns - approx. 52% of total receipts.

Municipalities and regions:

  • Revenue from withholding tax - approx. 32% of total receipts.
  • Revenue from tax on wages and salaries - approx. 31% of total receipts.
  • Revenue from tax returns - approx. 48% of total receipts.
 
Geographical Scope

Czech Republic.

 
Taxpayers
Domestic-source income of non-residents is Taxed
Not Taxed
Comments

Employment incomes of married couples are Taxed jointly
Taxed separately
Comments


Comments

Residents are taxed on their worldwide income, non-residents on their Czech source income.

 
Tax object and basis of assessment
As general rule, taxable income under personal income tax includes























Comments

Pension income is taxed under special conditions regarding other activities of pensioner.

Since 2014/01/01 gifts tax and inheritance tax have been incorporated under the Income Tax Act Section. In general, the revenue from gifts or inheritance is equal to the price of the acquired property determined in accordance with price regulations, i.e. Act. No. 151/1997 Coll. on property appreciation, in later amendments.


Income considered Domestic income
Worldwide income (subject to double-tax relief)
Comments

Benefits in kind
The following benefits in kind are usually (partially or fully) taxable












Comments


Comments

Tax base shall be the amount by which a taxpayer's income in the relevant taxable period (relevant calendar year) exceeds the documented expenses (or expenses as a percentage of income) that he/she incurs in order to generate, assure and maintain such income unless relevant sections of Income Tax Act on individual types of income provide otherwise. The tax base for taxpayers with income from dependent activity is computed as an income increased by the amount corresponding to the amount of obligatory contributions of social security insurance and health insurance paid by employer. Where taxpayer has concurrently two or more of the types of income, the tax base shall consist of the sum of the partial tax bases, computed separately for each type of income. Since 2014/01/01 gifts tax and inheritance tax have been incorporated under the Income Tax Act Section. In general, the revenue from gifts or inheritance is equal to the price of the acquired property determined in accordance with price regulations, i.e. Act. No. 151/1997 Coll. on property appreciation, in later amendments.

Categories of taxable income are:

  • Income from dependent activity including office-holders' emoluments.
  • Income from self-employment (agricultural production, trade, other business activity, intellectual property rights etc.).
  • Income from capital assets.
  • Rental income.
  • Other income.
 
Deductions, Allowances, Credits, Exemptions
Deduction for professional expenses.
The deduction is:





Comments

Where a taxpayer does not claim documented expenses, he may claim as expenses 80 % of income from agricultural production, forestry and water management, and of income from entrepreneurial activity under a handicraft trade licence; however, no more than 1,600,000 CZK may be deducted as expenses,  60 % of income from entrepreneurial activity under a trade licence; however, no more than 1,200,000 CZK may be deducted as expenses, 30 % of income from the lease of property included in the business property; however, no more than 600,000 CZK may be deducted as expenses, 40 % of other income from independent activity, except for some income described by the law; however, no more than 800,000 CZK may be deducted as expenses .

Where a taxpayer does not claim documented expenses, he may claim as expenses 30 % of his income from the leas of property (real estate, and movables), which is not a part of a business property up to the amount of 600,000 CZK.


Deductions from the tax base
The following items are usually (partially or fully) deductible

















Comments

The Income Tax Act defines deductions by special rules for corporations and individuals.

The tax base for a period of taxation may be reduced by payments for examinations verifying the results of further education under the Act on the Recognition of Results of Further Education.

Donations for purposes of science, education, culture, medicine, ecology, sports, and religion are deductible up to 15 % of the tax base. Their total value must exceed either 2% of the tax base or amounts at least CZK 1,000 and recipient (donee) must be established or domiciled in a Member State of the European Union, Norway or Iceland. An amount equal to the interest paid in the taxable period on a loan provided from a housing savings scheme or from a mortgage loan, provided that the taxpayer to finance his housing needs uses any such loan, shall be deducted from the tax base. The total sum of interest payments by which the tax base may be reduced with regard to loans granted to taxpayers living in one household may not exceed CZK 300,000. Contributions to private insurance system and private pension system are deductible from the tax base up to 12,000 CZK per year.

Tax losses may be carried forward for 5 years.


Allowances
The basic yearly allowance for an individual amounts to:
The basic yearly allowance for a couple amounts to:
Additional allowance for 1st child
Additional allowance for 2nd child
Additional allowance for 3rd child
Additional allowance for additional child
Additional allowance for old age dependents
Comments

Credits
The basic yearly credit for an individual amounts to: 24,840.00  EUR/National currency  or  %  of tax base
The basic yearly credit for a couple amounts to:
Additional credit for 1st child 13,404.00  EUR/National currency  or  %  of tax base
Additional credit for 2nd child 15,804.00  EUR/National currency  or  %  of tax base
Additional credit for 3rd child 17,004.00  EUR/National currency  or  %  of tax base
Additional credit for additional child 17,004.00  EUR/National currency  or  %  of tax base
Additional credit for old age dependents
There are tax credits for:

















Comments

Personal Income Tax Relieves (the amount deductible from tax):

  • CZK 24,840 for the taxpayer, additional CZK 24,840 for a spouse living in the taxpayer's household and with an income of less than CZK 68,000, CZK 2,520 for taxpayer - beneficiary of a partial disability pension, CZK 5,040 for taxpayer - beneficiary of a full disability pension,
  • CZK 16,140 if the taxpayer is an owner of a special disability card, CZK 4,020 for taxpayer - student until the age of 26 years (28 years in the case of a doctorate studies).
  • CZK 13,404 per child, CZK 15,804 per second child, CZK 17,004 per third and every other child living in a household with taxpayer.
  • Tax relieves for child placement corresponds to the amount of expenses demonstrably incurred by the payer for placing a maintained child of the payer in the given period of taxation in a facility providing care for children of pre-school age, including a nursery under the School Act, per child up to the amount ofminimum wage.

Where a taxpayer has parallel income from more types of activities (employment, capital income or other income), the eligibility of tax credits is maintained, if the sum of the tax-base where using the lump-sum expenses will be less than 50% of the total tax base.

 

Tax Relieves (the amount deductible from tax):

There are two categories of tax relieves available to the taxpayers depending on number of their disabled employees.


Losses
Losses can be
Carried-forward for Indefinite
 Years
Carried-back for Indefinite
 Years
Transferred to spouse or partner
Comments

Exemptions
The following income is exempted from income tax























Comments

The payments of pensions from the obligatory system are not being taxed up to certain limit (a pension that does not exceed 36 times of minimum wage in a taxable period is tax free).

Occasional income from renting movable property is exempted up to the limit of 30,000 CZK/year.

Income from occasional activities is exempted up to the limit of 30,000 CZK/year.

Revenues from donations and gifts have been taxed from 2014/01/01,  Revenues from donations and gifts are tax exempted among direct relatives (in the direct line) and among other relatives (in the collateral line), namely siblings, uncles, aunts, nephews, nieces, sposes, children´s spose (sons-in-law and daughters-in-law), sposes´s children, spose´s parents and sposes´s parents and individuals living with the donor in a common household for at least a year prior to the transfer and who for that reason took care of the common household or who were dependent on the donor for his/her maintenance (support). The gifts received in connection with performing an activity of employment or self-employment activity are still not tax exempted.

Revenues from heritage/inheritance have been tax exempted without any other exception since 2014/01/01.

Income from sale of immovable property is tax exempted if this property is used for permanent housing at least 2 years before selling or is owned for more than 5 years, income from transfer of shares and securities beyond of certain period of holding or up to the certain limit, etc.



Comments
 
Rate(s) Structure
The following personal income tax rates apply to aggregate annual income (allowances not included)
Bracket 1 From   EUR/Natcur
To   EUR/Natcur
Rate: 15.00 %
Comments

Regional taxes
Regional taxes are (rate in capital region) A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Local/municipal taxes
Local taxes are (rate in capital city) A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Special surcharges
There are special surcharges in the form of:
Surcharge 1 : Name:
A lump-sum amount:
A percentage of income: 7.0 %
A tax surcharge:
Comments

Since 2013 “special solidary surcharge” is introduced. The base of this surcharge is computed as a positive difference between 1. the sum income included in the partial tax base from employment and in the partial tax base from independent activity and 2. average salary according to the Social SecurityAct multiplied by 48. The rate of this special surcharge is 7 % from the base described above.


Separate taxation
Separate taxation applies to the following items: Employment income
Income from business or self-employed activities
Income from sport and entertainment activities
Benefits in kind (company car, meal cheques, etc)
Pension income
Owner-occupied immovable property
Dividends
Interests from government bonds
Interests from corporate bonds
Interests from special saving accounts
Interests from deposits
Royalties
Income from renting immovable property
Income from renting movable property
Capital gains on immovable property
Capital gains on movable property
Inheritance
Annuities from life insurance
Prizes and awards
Scholarships
Income from occasional activities
Revenues from donations and gifts
Revenues from lotteries and games activities
Comments

Withholding taxes
The tax is withheld when paid to residents on: Dividends: 15.00 %
Final Creditable
Interests from governments bonds: 15.00 %
Final Creditable
Interests from corporate bonds: 15.00 %
Final Creditable
Interests from special saving accounts: 15.00 %
Final Creditable
Interests from deposits: 15.00 %
Final Creditable
Comments

The dividends and shares in profit are taxed through a withholding tax at 15 %. The interests from savings accounts are taxed through a withholding tax at 15 %. Withholding tax 35 % for payers that are not tax residents of another EU Member State or another State that forms the European Economic Area, or of a third State or jurisdiction with which the Czech Republic has made a valid and effective international double taxation avoidance treaty regulating taxation and exemption of all possible kinds of income from international double taxation, a valid and effective international treaty or agreement on information exchange in tax matters for the area of income taxes, or that are contracting parties to a multilateral international treaty containing provisions on tax information exchange in the area of income taxes that is valid and effective for them and for the Czech Republic.

Withholding tax on income from the agreement to complete a job is creditable. Withholding tax on some of income from Czech sources is also creditable in the case of non-residents.



Comments
 
Tax due date

The employer withholds tax on employed income (monthly as a prepayment). The withholding tax is used for some special types of income. In other cases the income is taxed according to the annual tax return. Taxpayers of income tax (except for employees) are required to make prepayments at 6 months or 3 months intervals depending on the amount of their latest tax liability. The tax must be assessed and paid till beginning of April (till the beginning of July with tax adviser) and all prepayments must be cleared.

 
Tax collector

Local tax offices.

 
Special features
 
Economic function







Comments
 
Environmental taxes



Comments
 
Tax revenue
ESA95 code d51m (d51aa + d51ab + d51ac)

Year
Annual tax revenue (millions)
Currency
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2012 145,232.00 CZK 3.59
2011 142,752.00 CZK 3.55
2010 135,014.00 CZK 3.42
2009 136,023.00 CZK 3.47
2008 142,269.00 CZK 3.54
2007 155,690.00 CZK 4.06
2006 139,350.00 CZK 3.97
2005 137,937.00 CZK 4.23
2004 136,317.00 CZK 4.46
2003 125,399.00 CZK 4.48
2002 114,905.00 CZK 4.30
2001 105,406.00 CZK 4.11
2000 99,669.00 CZK 4.20
1999 92,962.00 CZK 4.16
1998 93,983.00 CZK 4.39
1997 87,356.00 CZK 4.47
1996 80,206.00 CZK 4.42
1995 70,361.00 CZK 4.45

Comments