Abolition of Withholding Tax on Income from Dependent Activities

From January 2026, the abolition of withholding tax applies only to income from dependent activities of individuals who are tax non-residents and are members of bodies of legal entities (e.g. directors or board members). The taxation of these members of statutory bodies will change as follows: instead of the current final withholding tax of 15%, an advance tax of 15 and 23% will be applied. They will also be required to file a tax return for the tax period from 2026 if the amount of this income for the tax period exceeds 36 times the average wage (for 2026, this is the amount of CZK 1,762,812).

From January 2027, withholding tax on income of individuals from dependent activities will be abolished completely. This means that income from work agreements up to a given monthly income and from small-scale employment will be subject to monthly tax advances. However, this income will not be subject to the obligation to file a tax return.