Taxes in Czech, Taxation in Czech, Taxes system in Czech
Law No. 586/92 Income Tax (hereinafter the Act) provides for:
· Income tax on individuals,
· Income tax law.
TAX ON INCOME FROM INDIVIDUALS (PIT)
Taxable personal income tax of natural persons. From the standpoint of determining
tax liability and how to pay the tax, there is an important distinction between residents and
Tax residents are those who are resident or ordinarily
reside in the territory of CR (at least 183 days per calendar year for
except for study or treatment). Residents have unlimited tax obligation
tax means that the tax be achieved by all the income they
both in the Czech Republic and abroad (in Poland).
Tax non-residents are persons whose defined on the basis of the above criteria
can not be considered residents. They are to the limited tax liability ie że
subject to income tax, which they obtain from sources in the exclusively
territory of the CR.
Subject to taxation PIT
The subject of income tax from natural persons are:
· Income from subsidiary activities (wage) and the benefits of exercise
· Income from business and other activities performed alone
· Capital income
· Income from the rental,
· Other income.
Income may be cash, as well as the kind obtained by
In § 4 of the Act lists the income exempted from tax. These include pensions,
pensions, compensation, some of the proceeds from the sale of movable and immovable property,
lottery winnings, etc. We recommend that you read the detail of the titles of these revenues,
there because they meet designated deadlines is a condition of release
from taxation. This applies for example, sales of homes and cars.
Tax return period
The tax return consists of a person whose income tax year in question
15.000 CZK exceeded unless they are exempt from income tax or income
taxed at a separate rate (eg dividends, shares in the profits of limited companies,
interest rate of bank deposits, etc.)
Tax billing period is the calendar year. If the taxpayer does not use the services of
tax consultant is obliged to submit tax returns and pay due
tax year to 31 March following the tax year. If a settlement on his behalf
of tax fraud by a tax advisor, both of these steps must be performed to 30
June the following year.
The amounts are not taxable
On the basis of § 15 of the Act, the tax base so you can deduct. not subject to
taxation of the base. These include interest on loans
housing needs according to separate regulations (up to CZK 300,000), donations
amounting to a total of at least 2% and at most 10% of the tax base, contributions
additional pension of at least 6,000 and a maximum of CZK 12,000 CZK
premiums for life insurance up to CZK 12,000, contributions to membership
trade unions to the amount of CZK 3000.
Tax deductible: in CZK
a) to each taxpayer's 24,840, 24,840,
b) the spouse, whose annual revenues
do not exceed 68,000 CZK 24,840, 24,840,
c) the dependent child taxable 10.680, 11.604,
d) the taxpayer incomplete collecting a disability pension 2520, 2520,
e) on taxpayers collecting disability benefits pełną 5040, 5040,
f) the taxpayer which has seriously impaired the legitimacy of the person 16140, 16140,
g) on the taxpayer - 4,020 students. 4020.
In addition to the deduction for each taxpayer as the item. and), other deductions from tax mogą
be used in 1 / 12 of annual limit for each calendar month in which
conditions were necessary for the deduction.
The tax rate
PIT tax rate in 2009 and 2010 is 15% of the tax base.
PIT tax base is the employee's gross salary, including
non-cash proceeds, net of income not subject to taxation and
exempt from tax and the amount due plus social security and health
paid by the employer.
Income of individuals from economic activity
The basis for determining the tax base of individuals engaged
business or profession, is a tax or accounting records.
Taxpayers who do not keep accounting records may take advantage of the lump sum
ie that the reference to calculate the taxable amount from the total revenue
(Shown as tax records), shall be deducted by the cost of interest rates
defined in the Act.
In 2010, the following standard cost rates:
· 80% of revenues in agricultural production, forestry and water management through the implementation of
· 60% of revenues from business activities with the exception of craft production,
· 40% for other types of activities carried out under separate
provisions (such as barristers, auditors, tax advisors, architects, doctors, etc.)
or income from other gainful activities performed alone (professional
athletes, artists, experts, translators, bankruptcy receivers, etc.)
Tax records to be settled in a lump sum may lead small
operators are not included in the commercial register CR, whose annual turnover does not exceed
25 million CZK.
TAX Income Tax (CIT)
Payers of income tax from legal persons are those persons that are not
· Legal persons - traders entered in the commercial register,
Management Institutions having legal personality which are not founded or established in order to
Ww. taxpayers, who in the CR his seat or his leadership,
under which is understood as the address of a place where the taxpayer is managed, have a duty
Tax liability for both income derived from sources in the CR, as
also from the revenues generated abroad.
The taxpayers, not having on the territory of the Czech Republic its location, shall
tax only on income derived from sources in the territory of the Czech Republic.
Subject to taxation CIT
The subject of taxation are:
revenues from all types of business and management of all components
property (eg, revenues from the sale or lease of assets). In
For taxpayers who are not established or appointed to conduct the
business, are subject to tax revenues from other activities, income
advertising, rentals, etc.
The taxable amount is the difference, by which revenue, excluding revenue
which are not subject to income tax and exempt from taxation,
outweigh the costs (expenses), taking into account the substance and timing
belonging to a given billing period.
Accountant profit before tax reduced by the revenues that are not
subject to tax (eg income received in respect of gifts and bequests), the
exempt from income tax (eg income specified in the Act of
green), with income taxed at special tax rates, and increased
a cost that does not include the deductible (for example, expenditure on
representation, the remuneration for members of statutory bodies and other bodies of persons
legal expenses for the acquisition of fixed assets and intangible assets,
Deductions from taxable income
From a fixed tax base can be deducted:
a) the tax loss for the period of a maximum of 5 consecutive years following the year in which
has been established,
b) 100% of expenditure on research and development - focuses on companies with their own
advanced research and development and not benefiting from subsidies and support measures
c) a donation of at least CZK 2,000 and a maximum of 5% of the base
taxation, less the value of the items a) and b).
CIT tax rate
According to § 35 of the Act may be deducted from the tax:
· CZK 18,000 for each employee with a disability,
· CZK 60,000 for each employee with a disability to a higher category
· 50% tax on enterprises employing at least 25 employees,
where the ratio of people with disabilities more than 50% of workforce
Legal entities shall submit a tax return by 31 March of the year following the year
tax. Legal persons who shall audit accountant,
submit a tax return until June 30. The last date fixed for the submission of evidence
is also the deadline for payment of tax due.
Depreciation of fixed assets
Czech Income Tax Act (§ 26 - § 30) makes a distinction between tangible fixed assets
Tangible fixed assets are included in assets whose purchase price
exceeds CZK 40,000, and the lifetime is longer than one year. In this group there are
· Buildings, houses, apartments and residential premises,
· Buildings, except for operating mining sites, small structures in the
plots, fences for the production of forestry and hunting,
· Other assets defined in the Act.
Fixed assets are classified as intangible assets whose price
purchase exceeds CZK 60,000, and the lifetime is longer than one year. In this group
includes, among others:
· Costs business organization,
· Intangible results of research and development,
• Included Software,
· Rights property, patents, licenses,
· Other intangible assets.
Law § 26 - § 33 establishes a means of depreciation of fixed assets (or uniform
linear, accelerated, or declining balance), sets a uniform annual rate of depreciation
and accelerated depreciation rates, as well as specifies the methods and rules
The basic division of groups of depreciation of fixed assets represent the table below:
Group depreciation of tangible fixed assets
depreciation of tangible fixed assets Sample
1 3 years computers, other technical office equipment, tools
2 Most of the five years of production machines, cars, vans,
tractors, buses and cars
3 steam boilers 10 years, trams, trains
20 years 4 towers, masts, buildings with lightweight materials, pipelines,
Five thirty years and halls of buildings, industrial, residential facilities,
bridges, roads, highways, water works
6 50 years Office buildings, department stores, schools, hotels
Due to the prevailing economic crisis, the Czech government under Law No.
216/2009 Sb. revised the system of depreciation of assets purchased
period from 01.01.2009 to 30.06.2010 years and belonging to groups 1 and 2 of depreciation.
Assets belonging to a group of depreciation can be amortized in
period of 12 months in a uniform system of depreciation. Assets of the two groups
depreciation can be amortized over 24 months with a uniform
depreciation, the depreciation in the first year may reach 60%, 40% in the second
the price of the product.
In the case of intangible assets to which the taxpayer has the right
use for a specified period, the annual depreciation is defined as the ratio of value
the initial and the period specified in the contract. In other cases, the
Intangible assets are amortized straight-line, according to the table as below.
Groups and amortization of intangible assets
Type of asset depreciation time
Minimum period of depreciation
in months in the note.
Audiovisual Work 18 9
SW 1936 1918
Intangible results of research and development 36 18
Expenditure on the organization of the firm in 1960 -
Other measures intangible assets 72 36
Improvement of fixed assets
Enhancing the assets determined § 33 of the Law on Income Tax. In this
term means the expenditure incurred on:
· Completed superstructure, additions and construction,
· Repairs (interference of the property, which is aimed at changing its destination or
· Modernization of capital assets (equipment and / or enrichment opportunities
use of assets)
if they exceed the total amount of CZK 40,000 for the asset in the unit
a billing period. The value of improvements increases the value
initial asset in the case of linear depreciation and the increase
net worth in the case of accelerated depreciation.
Particular attention should be paid to contrast the cost of repairs, which are included in
deductible in the year of incurring the cost of improvements,
affect the valuation of the asset, and costs are in the form of tax deductions
depreciation. The biggest problem occurs when the nature of the distinction
costs associated with the interference of the property for property.
Accounting for the cost of repairs requires careful documentation of the collection
confirming execution of the repair, rather than improvements. Reclassification of the costs of repairs
the improvement in the CR is the subject of frequent additional tax surcharges.
Improvements also increases the initial value of intangible assets. For
improvements shall be the expenditure incurred on enrichment equipment, raising
operating parameters or actions which aim to change the destination
component, if these actions after its value exceeds the amount of CZK 40,000.
Advances in the CIT
Payment of withholding income tax from natural persons and legal persons shall § 38a
Income Tax Act.
Reserve for the purpose of determining the tax base CIT
Law No. 593/92 of the reserves for the purposes of determining the tax base
CIT defines how to create reserves.
To the statutory provisions that may arise in the conduct of
economic reserves are primarily to:
· Repairs of fixed assets
· Breeding activities,
· Odmulanie joints,
· Decontamination of land affected by mining.
Provision for asset refurbishment
A provision for the refurbishment of an asset can be created on the assets subject to
depreciation period of 5 years or more, if the taxpayer owns or rents it, and
on the basis of the contract is obliged to carry out repairs. Reserve for repairs
for individual assets can not be created in only one
period. The maximum period is a provision in the case of
assets classified as:
• 2 Group 3 amortization periods,
· 3 groups of six amortization accounting periods
• 4 groups of 8 amortization accounting periods
· 5 and 6 groups of 10 amortization accounting periods.
In the case of movable assets, the reserve for repairs can be created in
Depending on their size or volume (eg a truck).
The Act also regulates the issues of documentation and settlement deadlines established