• We offer the following services:
  •  Book-keeping
  •  Preparation and submission of VAT returns
  •  Preparation of accounts
  •  Completion and filing of online company tax returns
  •  Tax advice for small/medium sized businesses and individuals
  •  Resident and non-resident tax advice
  •  Registration of new businesses for tax and VAT
  •  Payroll administration
  •  Registration of the employer and employees with the State Authorities (Health Insurance, registration to Tax from dependant activities etc.)

BUSINESS SETUP

You can set up the following types of business in the Czech Republic:

  • Limited Liability Company (SRO)
  • Joint Stock Company (AS)
  • Partnership
  • Branch

Limited Liability Company (SRO)

This is the most popular form of company to be incorporated in the Czech Republic. The minimum required capital is a mere CZK 1 (roughly €0,05). In the event of only one shareholder, all of the share capital should be paid up before registration with the Commercial Register. The company can have up to 50 shareholders, and individuals are restricted to three Limited Liability Companies for sole shareholding. Limited liability companies with just one shareholder cannot be a sole shareholder of another limited liability company. The profits of the company should be put into a reserve fund and built up to 10% of the registered capital.

Under Czech law, the duty to execute an annual report and statutory audit is compulsory for limited liability companies that fulfil the following criteria in two consecutive accounting periods:

  • Total assets exceeding CZK 40 million (gross assets)
  • Annual net turnover exceeding CZK 80 million
  • Average number of staff greater than 50

Joint Stock Company (AS)

This form of company is usually incorporated by larger businesses as the required share capital is much greater; CZK 2 million (€70,000) as a minimum standard, or CZK 20 million (€700,000) if it comes by way of a public offering. 30% of the share capital must be paid up. The profits of the company should be put into a reserve fund and built up to 20% of the registered capital.

Under Czech law, the duty to execute an annual report and statutory audit is compulsory for joint stock companies that fulfil the following criteria in two consecutive accounting periods:

  • Total assets exceeding CZK 40 million (gross assets)
  • Annual net turnover exceeding CZK 80 million
  • Average number of staff greater than 50

Partnership

There are two types of partnership;

General partnership, where the partners involved have equal and unlimited liability of the company

Limited partnership, where at least one of the partners involved has limited liability

Branch

A branch is part of a parent company and not a separate legal entity in itself. Before registration a branch must present a trade licence. The appointed manager of the branch may be a Czech or foreign national, but the accounts must all be prepared in Czech.

MAIN TAXES IN THE CZECH REPUBLIC

The two main types of taxation in the Czech Republic are:

  • Corporate Tax
  • Personal Income Tax
  • Value Added Tax

Other types of tax such as Withholding Tax may apply.

CORPORATION TAX

This is based on the annual profits of companies that are Czech residents.

The Corporation Tax rate in the Czech Republic is 19%.

PERSONAL INCOME TAX

All residents, or tax residents, of the Czech Republic qualify to pay Personal Income Tax on their earnings.

Personal Income Tax has a flat rate of 15%, or 22% for those earning over 48x the average Czech wage (around €45,000).

VAT

The VAT rate in the Czech Republic is 21%. 15% reduced rates (since January 2013) are applicable to food, books and some services, with services such as financial and postal completely exempt.

VAT payments and returns should be filed quarterly or monthly, based on the company turnover.

WITHHOLDING TAX

This applies to dividends, interest and royalties paid to non-residents and the rate stands at 15%.

Useful Links

Czech Invest, the inward investment agency:

www.czechinvest.cz

Ministry of Finance:

www.mfcr.cz

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