Personal taxation in the Czech Republic

Czechs who are foreign residents are liable for taxation only on their Czech derived income. Couples with at least one child may choose a common tax calculation subject to certain conditions. Czechs who are foreign residents may utilize tax deductions, provided that they derive 90% of their income from Czech sources.

Income tax in the Czech Republic

The income liable for taxation is usually the cumulative income of all sorts from which the permitted expenses are deducted. The taxation rate on income is a fixed 15%.

Income from rent

The income from leasing a non-commercial property under the common ownership of a married couple will be taxed only as the income as one of the members of the couple. Tax liable income can be calculated in one of two ways detailed in the article in this link.

• • Capital gains tax from realization of real estate in the Czech Republic is usually included in the calculation of the total liable income and is taxed at the regular income tax rate of 15%. The capital gains are usually calculated as the price of the property at the sale minus the costs of purchase.

  • Capital gains from selling properties that are not tax-deductible businesses in the event that the property owner has held the property for at least 5 years.

Inheritance tax

Its rate is 0%. To read more press here.

Purchase tax

A purchase tax is placed in the Czech Republic on all real estate properties at purchase, with the exception of properties purchased from a contractor. The purchase tax is collected from the buyer, and its rate is 4% of the purchase price.

For more on the tax system of the Czech Republic – read here.