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Company Formation Czech Republic

Company Formation Czech Republic

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Articles

Tax Minimization in Czech Republic

Updated on Friday 22nd April 2016

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Tax-Minimization-in-Czech-Republic.jpgCzech Republic is a state in which the level of taxation is generally lower, compared to other countries from its vicinity. Both natural persons and legal entities can benefit of various tax deductions and incentives applicable in Czech Republic; if you want to find out to which deductions you are entitled to, our Czech company formation specialists can provide you with further information. 
 

Czech tax exemptions

 
Businessmen interested in the tax legislation applicable to companies in Czech Republic should know that the local authorities offer a set of rules and regulations advantageous to foreign businesses, which can be emplpoyed as tax optimization solutions. One major tax deduction applicable to foreign companies is related to the standard corporate rate. Although local and foreign companies are imposed with the same taxation system, in the case of corporate tax, the local authorities impose a corporate tax of 15% on foreign sourced income , compared to the standard corporate tax of 19%. 
 
Antoher tax minimzation solution can be used by companies with operations in several sectors which are 100% exempt of Value Added Tax (VAT), which is currently applicable at the rate of 21%. As such, business activity in the field of exports or international transportation is not required to pay any VAT. 
 
Companies and other legal entities which provide services in several domains are also full exempt from paying the VAT; services in the broadcasting industry, postal industry, insurance, education and gambling do not have to pay this tax; our company formation agents can provide you with further information on this matter. 
 

Corporate deductions 

 
Czech legislation allows a series of corporate tax deductions for operating expenses. Also, charity donations can be deducted by the company only if the total value of the donation is above CZK 2,000; the tax can be reduced up to 10% of its standard rate. 
 
Other tax minimization options companies can use is the deduction of the costs of fix assets and lease payments.  Expenses incurred by the research and development department can also be deducted under several conditions, which can be explained by our company formation specialists
 
If you need further information on the tax minimization in Czech Republic, please contact our company formation consultants for assistance. 

Comments

  • Martin 2016-02-22

    It seems that Czech Republic offers a favourable environment to foreign investors.

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