Where you live and where you pay income tax are not always the same country. Especially in your first and last year here, your tax residency can be somewhere else. This guide covers tax residency, what goes into a Czech tax return, and the tax benefits that lower it.
Where are you tax resident?
Under Czech law you are tax resident in the Czech Republic if you have your home here, or if you stay here at least 183 days in a calendar year. Most people know the 183-day rule, but it is only the start. When two countries both see you as their tax resident, the double tax agreement (DTA) between them decides, in this order:
- Permanent home: where you have a home available to you, for example a Czech rental contract. A visa or residence permit helps to show it.
- Centre of vital interests: where your family lives and where you earn your money. A Czech trade license or Czech job counts here.
- Habitual abode: where you actually spend most of your time.
- Nationality, as a last resort.
Owning a property in a country does not make you tax resident there by itself. And being tax resident is not the same as owing much tax: you can be resident in a country and still owe little or nothing there.
Companies and income abroad
As a Czech tax resident, you declare your worldwide income here, also income that was already taxed abroad. The DTA then decides where it is taxed and how double tax is avoided.
- US citizens also file in the US every year. The foreign earned income exclusion (USD 130,000 for 2025, USD 132,900 for 2026) helps, but it pays to plan: sometimes moving an invoice into the next year, or into this one, saves tax.
- US LLC: a single-member LLC that the IRS treats as a sole proprietorship behaves more like a trade license than an s.r.o. This affects both your Czech and your US tax return, and it often makes sense to have a Czech trade license next to the LLC.
- Foreign companies (an offshore LTD, an Estonian company, a UK partnership): if you run it from the Czech Republic, its place of management, and with it the tax, can move here. The reverse also happens: an s.r.o. managed from abroad can be taxed abroad.
The comment we hear most: "If I had known this, I would not have set up a company in country X." It is much easier to get the structure right before you start than to repair it afterwards.
Digital nomads
Working online from anywhere is a great option, but "not being tax resident anywhere" is usually wishful thinking, and sometimes simply wrong. A home base in a country with reasonable taxes is safer than dropping off the radar, and it gives you somewhere to return to. The Czech Republic can be that base, with little red tape and, for most freelancers, modest taxes.
Your Czech income tax return
The tax return covers a calendar year and is due in spring of the next year: by 1 April on paper, about a month later (early May) when filed electronically, or by 1 July when a tax advisor files it. It combines all your income: employment, trade license, capital income, rent and other income, from the Czech Republic and abroad.
Who has to file? Everyone with taxable income above 50,000 CZK a year, or with a tax loss. Employees with only a salary do not file: the employer settles their tax. But if you have other income next to your salary (from a trade license, rent, investments or other income) above 20,000 CZK a year, you file a tax return yourself. Until 2023 this limit was 6,000 CZK.
Income tax is 15% of the tax base up to 1,762,812 CZK (2026), and 23% on the part above it. Tax benefits then lower the result (see below).
If your last income tax was above 30,000 CZK, you pay advance payments for the next year: twice a year above 30,000 CZK, four times a year above 150,000 CZK. We tell you the amounts and dates together with your tax return.
The five types of income
The return itself has five income sections (paragraphs). Simple on paper, but this is where the mistakes happen: every year we correct returns made with an online calculator or by a friend. For a foreigner, especially in the first year or with missing registrations, a return looks quite different from a Czech one.
- § 6 Employment: salary, also stock options from your employer. The annual overview from your employer is not a tax return.
- § 7 Self-employment: trade license, other freelance professions, and in most cases Airbnb.
- § 8 Capital income: interest, dividends and profit shares, mainly from abroad (Czech dividends are usually taxed at the source).
- § 9 Rental income from property you rent out long-term.
- § 10 Other income: selling shares, crypto or property, and occasional income. Selling a house or shares at a profit goes here, not in § 8.
Some § 10 income is tax-free: occasional income up to 50,000 CZK a year, shares and crypto held for more than 3 years, sales of securities up to 100,000 CZK a year, and property after a holding period. Which section income belongs to is not always obvious: director's fees, foreign company profits and LLC income can go in different places depending on your situation. A DTA can also mean you owe no Czech tax at all on some income. No online calculator handles that correctly.
More details: the personal income tax return. Do you have a trade license? Read about the three tax methods first.
Tax benefits for 2026
Deductions lower your tax base:
- Mortgage interest: up to 150,000 CZK a year.
- Pension savings, life insurance and long-term investment products: up to 48,000 CZK a year together.
- Gifts to charity, and blood donations.
Tax credits lower the tax itself (per year):
- Every taxpayer: 30,840 CZK
- Spouse with an income up to 68,000 CZK a year, living with a child under 3: 24,840 CZK (49,680 CZK if the spouse holds a ZTP/P card)
- Children: 15,204 CZK for the first, 22,320 CZK for the second, 27,840 CZK for the third and every next child
- Taxpayer with a ZTP/P card: 16,140 CZK
Tax credits can bring your tax down to zero, but not below. The child credit is the exception: what is left over is paid out to you.
New from 2027: two credits return, for the first time in the tax return for 2027 (filed in 2028):
- Kindergarten costs (školkovné): what you paid for a kindergarten, nursery or similar, also abroad, up to 24,900 CZK per child a year (the minimum wage)
- Students up to 26 (28 for full-time doctoral students): 4,020 CZK a year
