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Corporate Income Tax

Income Tax of an SRO Company in Czech Republic

The Tax year is equal to the calendar year in Czech Republic. For SRO companies the Corporate Income Tax is 19%. For private individuals the Personal Income Tax is either 15% or 23% for the part of the Tax Base (*not* Revenue) over cca 1.7 M CZK.

Generally speaking, there are 4 ways to take money out of an SRO:

• If you put money into the SRO for expenses at start, you might want to return that money to you (this is not income),
• A shareholder cn receive a loan from the SRO (not income, but should be paid back)
• Paying out Dividends - after the 19% CIT, the Profit After Tax is subject to Withholding Tax (15 to 23%). You'll lose roughly 1/3 in 2 types of taxes
• Paying out a Salary. Almost unavoidable if your Business Visa extension depends on it, but the total costs are about 1.8 times the Net Salary (!)
• You can not invoice your own SRO with your Trade License (!)
• Your spouse / friend can invoice your SRO with his / her Trade License (!)

VAT Registration

Another topic that never fails to raise questions is VAT registration.
Starting 2025, the limit for 'Full VAT' registration is 2.54M CZK per calendar year (before 2023 it was 2M CZK per 12 consecutive months).

For invoicing business in the EU however, a 'VAT-Light' registration is sufficient and for invoicing businesses outside EU no VAT registration of any kind is required.

Read this elaborate article on VAT in Czech Republic for more information.

For more information on Income Tax and VAT Book a Consultation by ZOOM / Skype / Whatsapp / Phone or email.