Tax system in the Czech Republic

Here you can find general information on the most important tax types in the Czech Republic.

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The current tax system in the Czech Republic was introduced in January 1993 and has been reformed since 01.01.2008 (the last “bigger” modification was introduced through the “tax packet” on 01.01.2013) The system currently includes the following tax types:

Direct taxes: income tax, property tax, road tax, inheritance tax, gift tax, real estate tax and real estate transfer tax
Indirect taxes: value-added tax, excise tax

1. Income tax

The income tax must be paid by all individuals and legal entities from their income, further detailed information can be found here.

2. Value added tax (VAT)

All companies with a turnover of more than CZK 2,000,000 (approx. EUR 40,000) in the last 12 months are subject to VAT. More detailed information can be found here.

3. Road tax

Road tax is levied on vehicles used for commercial or similar activities in the Czech Republic. Different tax rates apply to passenger cars and trucks, which are based on the total weight of the vehicle and cubature for passenger cars and on the total weight and number of axles for trucks over 3.5 tons.

Besides the road tax, all trucks and buses over 3,5 tons are subject to highway toll at all motorways and selected highways and expressways. All passenger cars must be equipped with a motorway e-vignette to be able use the motorways (including private owned cars). More information to motorway toll and e-vignettes can be found here.

4. Real estate tax

The real estate tax consists of the property tax and the building tax. The tax rates depend on the area of the property and the way in which it is used. Different tax rates apply in different municipalities and cities. In general, the highest tax rates apply in the largest cities and for commercially used properties the tax rates are higher than for those used for living.

5. Real estate acquisition tax

The rate of this tax is 4% of the tax base, which is usually equal to the purchase price of the property. In September 2020 this tax was retroactivelly cancelled from 31st March 2020.