Types of taxes in the Czech Republic

The division of taxes in the Czech Republic is a relatively complex matter, however, on the simplest level, the taxes are divided into direct and indirect taxes.

Direct taxes represent a situation where a taxpayer pays for himself and for his own account.

Indirect taxes then represent the situation when the taxpayer pays, but on the account of another taxpayer, from whom he had previously collected the tax, added to the price of the goods.

Types of taxes do not undergo regular developments and they are virtually unchanged.

Types of taxes in the Czech Republic

1) Direct taxes:

Income tax

Personal income tax (“OSVČ”, "živnost" or employment) - 15% of the tax base

Corporate income tax (“s.r.o.”) - 19% of the tax base

(for more information on personal and corporate income tax, please refer to our separate articles)

Property taxes

Property tax (“Daň z nemovitosti”) – This tax applies to every owner of a land or building regardless of their income. In the case of buildings, the amount of the property tax is determined by the floor plan of the above-ground section (in m2). For flats and non-residential premises, the area of ​​the floor area is multiplied by a constant of 1.2. In terms of land, the amount of the tax is calculated here according to the value base of the land in CZK and physical units (m2).

Inheritance tax (“Daň dědická”) – The subject of this tax is acquisition of property (movable/immovable) by inheritance and is paid by the heir of the property.

Gift tax (“Daň dědická”) – This tax is deducted from a free transfer/acquisition of property (movable/immovable) and is paid by the person who is acquiring the property. The tax rates are based on a rather complex scheme that combines the level of the family relationship (I. to III.) and the financial amount of the acquired property.

Property transfer tax (“Daň z převodu nemovitosti”) – Property transfer tax occurs when someone buys or sells a property. The transfer tax is currently at 4% and is usually paid by the seller, however, there are occasions when the tax is paid by either both or by the buyer.

Road tax (“Silniční daň”) – This tax is paid by owner of motor vehicles registered in the Czech Republic and used for business purposes. This tax is calculated based on the engine displacement or in case of trucks – the maximum of permissible loads. This tax is significantly subsidized for owners of hybrid or fully electric cars.

2) Indirect taxes - consumption tax that is included in the final price of goods and services.

Universal Tax - Value Added Tax (“DPH” - 21%, 15%, 10%) on almost all goods and services excluding e.g. education, TV broadcasting or health care

Selective tax - Excise tax on selected commodities (“Spotřební daň” on e.g. alcohol, beer, wine, cigarettes, mineral fuels)

Ecological tax – (Ekologická daň) one-time fee associated with registration of a motor vehicle.

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