Austrian investors who are interested in opening a company in Czech Republic can benefit from the stipulations of the treaty for the avoidance of double taxation signed by authorities of the both states. The double taxation treaty (DTA) was signed in 2007 and it stipulates the way in which income taxes will be imposed to natural persons and legal entities operating on one of the two markets. Our team of Czech company incorporation specialists can provide assistance on the main provisions of the treaty.
Taxes covered by the Czech- Austrian DTA
The DTA is applicable for income and capital, such as the total income, total capital, elements of the income, or taxes on income which can derive from movable or immovable property. According to Article 2(2), the Czech Republic- Austria DTA is also applicable to taxes from wages and those applicable to capital appreciation.
The following video offers a short presentation on the double taxation treaty signed by Austria and Czech Republic:
Austria imposes the following taxes:
•the income tax;
•the corporation tax;
•the land tax;
•the tax applicable to agricultural/forestry companies;
•the tax on vacant plots.
Czech Republic imposes the next taxes:
•the income tax applicable to natural persons;
•the income tax applicable to legal entities;
•the tax on immovable property.
It is important to know that the differences between the taxes applied by each country are an effect of the local legislation but, according to Article 2(4) of the convention, the contracting states are obliged to apply the provisions of the DTA to similar taxes prescribed by the local law; our team of Czech company formation representatives can provide more details on this matter.
If you have decided on a business and need ateam of accountants in Czech Republic, our advice is to contact us and find out what kind of services can be useful to you. Audits, payroll, bookkeeping, annual financial statements, debt monitoring, tax advice and compliance, and even tax minimization options are available for your firm, as our specialists have extensive experience in these fields.
Provisions of the Czech Republic – Austria DTA
According to the stipulations of the convention, a resident person of a contracting state refers to any person who, under the rules of the state, is liable to taxes in that particular state.
Austrian companies operating in Czech Republicare taxed under the laws of the state in which the companies have their headquarters and they are liable to taxation in Czech Republic only in respect to the income gained in this country. At the same time, it is important to know that Czech authorities can tax Austrian companies only if they operate through a permanent establishment.