Investor Presentaiton
The salaries of employees are usually subject to the
deduction of wage tax withheld by their employer on a
monthly basis, with possible annual reconciliations. It is
possible to second expatriate staff through a permanent
establishment of a foreign employer that, although taxable, is
not registered in the Commercial Register.
Employees of foreign companies may fall under a further
possible tax treatment, the "deemed employer" rule, which
is essentially an anti-avoidance provision.
The rule may apply if employees of a foreign employer
work in the Czech Republic under the control of a Czech
person who pays a fee to the foreign employer for their
services. Here, the Czech person is regarded as the
employer for tax purposes and has to account for the
employees' income tax.
Resident and non-resident individuals may claim a basic
personal tax allowance of CZK 30.840 per year (limit applicable
for 2022). Various other credits are granted to residents, such
as a tax credit of CZK 24.840 per year for a spouse living in
the taxpayer's household if the spouse's annual income does
not exceed CZK 68.000, and tax allowances for children (a
tax allowance of CZK 15.204 for the first-born, CZK 22.320 for
the second-born and CZK 27.840 for the third-born and any
subsequent child). Tax allowances up to the amount of the
minimal wage announced for a given tax year (CZK 16.200 for
2022) can be claimed for fees paid to childcare facilities.
Allowances are also granted to residents of the EU or EEA if
at least 90 percent of their income is derived from sources
in the Czech Republic. The amount of income from foreign
sources should be confirmed by the foreign tax authorities in
the state of residence.
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