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How to Do Business in the Czech Republic

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Finance

TAXATION SYSTEM

The current tax system in the Czech Republic was established in 1993. Taxes are divided into 3 basic groups – direct taxes, indirect taxes and other taxes. The Czech Republic also has a broad network of double taxation treaties with both EU and non-EU countries. These double taxation treaties are based mainly on the OECD Model Tax Convention. more

MACROECONOMIC FORECAST IN THE CZECH REPUBLIC

The coronavirus pandemic, the anti-epidemic measures taken, and their knock-on effects have caused a deep and synchronous downturn in the global economy. Its depth is unprecedented in the post-World War II period. Economic policy in all the countries affected has responded with drastic easing and the adoption of massive fiscal and monetary stimuli, which should help minimise the pandemic’s impact on long-term growth. More

BANKING SECTOR IS STABLE AND LIQUID

The structure of the banking sector has not changed basically over the medium term. As of 31 March
2015, a total of 46 entities were present in the Czech market (in the form of a valid licence). The
structure of the banking sector is formed by 4 large banks, 8 medium-sized banks, 6 small banks,
23 subsidiaries of foreign banks and 5 building savings banks. 38 entities, 15 of them banks and
23 subsidiaries, are controlled by foreign owners. Domestic owners control 8 banks, two of them
with state participation. At the end of the 1st quarter of 2015, the total assets of the banking sector
amounted to CZK 5 439.5 billion, a 5% increase year-on-year. Out of the total assets, 57% were
accounted for by the four large banks (i.e. banks with over CZK 250 billion of assets).

 

Full article you can find: https://issuu.com/ppagency/docs/db_aj_2015_web/54

ENTREPRENEURSHIP OF FOREIGN ENTITIES AND ITS TAXATION IN THE CZECH REPUBLIC

Entities that are not tax residents of the Czech Republic may become liable to income tax according to
the Income Tax Act No. 586/1992 Coll., as amended, if they receive income derived from the territory of
the Czech Republic. Although the basic level of taxation of this income is relatively low (corporate income
tax 19%, natural persons 15%), it may become a fundamental complication for their business activities.
It is essential to realise the fact that, in some cases, income tax of tax non-residents is withheld in a form
of withholding tax from gross revenues (at the rate of 5% or 15%), and not from profit.


Full article you can find: https://issuu.com/ppagency/docs/db_aj_2015_web/56

EMPLOYEES – TAXATION, SOCIAL SECURITY, AND HEALTH INSURANCE

The extent of an individual’s taxation in the Czech Republic depends on the individual’s tax residency
status. Czech tax residents are subject to tax on their worldwide income. Czech tax non-residents are
subject to tax on Czech-source income only. Tax non-residents are taxed in the same way as residents on
their Czech-source income, except for certain types of income.

 

Full article you can find: https://issuu.com/ppagency/docs/db_aj_2015_web/61