Personal income tax settlement for foreigners in the Czech Republic

Tax obligations of foreigners

Foreigners receiving income in the Czech republic could be obliged to submit annual tax returns to the Tax Authority. They are also entitled to take advantage of available tax reliefs and deductions.

Taxpayers obliged to settle PIT in the Czech Republic

Foreigners are obliged to submit personal income tax returns in the Czech Republic, who were, for example, in the position of:

  • employees employed by a foreign employer but performing their duties in the Czech Republic, if the employer did not withhold advance tax;
  • self-employed person;
  • persons receiving income from selected activities such as f.e. income from the use of immovable and movable property in the Czech Republic, income from independent activities carried out in the Czech Republic (provided that withholding tax has not been applied);
  • persons who have established a so-called permanent establishment within the meaning of the relevant tax regulations.

Although in some cases there is no obligation to submit a tax return, this method is often more advantageous for foreigners because it allows them to claim tax reliefs and deductions.

The way the tax return is prepared varies depending on the taxpayer's status and the type of income earned.

Tax reliefs

Foreigners who earn income and pay personal income tax in the Czech Republic can take advantage of available tax preferences, reliefs and deductions if they meet certain legal requirements. These reliefs are only claimed in the tax return submitted.

Examples of available tax reliefs:

  • basic tax credit per taxpayer;
  • the institution of income splitting per cooperating person for business income;
  • tax credit for dependent child;
  • tax credit for student, for disabled person, for pre-school fees;
  • deduction of donations (from the tax base).

How we can help:

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Contact our expert

Jiri Sindelar
Jiří Šindelář
Tax Director