Czech Republic Tax Exemptions and Reduced Rates (2025)

It's important to note that Czech tax laws are subject to change, so you should always verify the latest information with the Czech Tax Administration or a qualified tax advisor. Here's an updated overview based on current information:

Dividends:

  • Dividends from Foreign Companies (Individuals): Dividends received by individuals from foreign companies are subject to a withholding tax of 15%.
  • Dividends from Foreign Companies (Corporations): Dividends received by Czech corporations from foreign corporations may be exempt under certain conditions, including compliance with the EU Parent-Subsidiary Directive.
  • Dividends from Czech Companies (Corporations): Dividends received by a Czech company from another Czech company are generally exempt from corporate income tax, provided specific conditions are met (e.g., holding period, share percentage).


Interest Income:

  • Interest Income from Abroad (Individuals): Interest income received by individuals from foreign sources is generally subject to a 15% withholding tax.




Capital Gains:

  • Sale of Main Residence: Capital gains from the sale of a main residence are generally tax-exempt if the property has been held for more than two years.
    There are specific conditions that must be met.
  • Sale of Other Real Estate: Capital gains from the sale of other real estate are generally tax-exempt if the property has been held for more than five years.
    There are specific conditions that must be met.


Sale of Shares (Individuals):

  • There are new limitations being put into place regarding the tax exemption of capital gains from the sale of shares in companies.
  • The previous exemption of sales below CZK 100,000 per year has been changed.
  • It is vital to check the current conditions regarding the tax exemption of capital gains from the sale of shares.


Important Notes:

  • EU Parent-Subsidiary Directive: The exemption for dividends received from EU companies is subject to conditions outlined in the EU Parent-Subsidiary Directive, such as minimum shareholding and holding period requirements.
  • Conditions and Limitations: Tax exemptions and reduced rates often come with specific conditions and limitations.
    Always verify the details with the Czech Tax Administration or a tax advisor.
  • Changes in Legislation: Tax laws can change, so it's crucial to stay updated on the latest legislation.




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