Taxation for Ukrainians in the Czech Republic

The Czech Republic is one of the most popular countries for immigration from Ukraine. This is due to its developed economy, high standard of living, and loyal conditions for foreigners.

Taxes in the Czech Republic are regulated by:

• The Law on the Income Tax of Individuals
• Tax Code (Daňový rað).

To determine whether an individual is a tax resident of the Czech Republic, the following factors must be taken into account:

• Whether the person was in the Czech Republic for 183 days in a calendar year (regardless of whether these days were consecutive).
• Did the person have a center of life interests in the Czech Republic (taking into account such factors as place of residence, family ties, place of work, sources of income, etc.)?

If a person meets at least one of these criteria, he is considered a tax resident of the Czech Republic.

In the case of Ukrainians living in the Czech Republic, it is often appropriate to apply the first criterion. This is because most Ukrainians come to the Czech Republic to work, and therefore spend most of the year in the country.

However, if a person has family or other life interests in the Czech Republic, they may be considered a tax resident of the Czech Republic, even if they have not been in the country for 183 days in a calendar year.

Here are some additional factors that may be taken into account when determining tax residency:

• Does the person have real estate in the Czech Republic, which is his main place of residence?
• Does the person have bank accounts, credit cards, etc. in the Czech Republic?
• Whether the person participates in political or social activities in the Czech Republic.

Taking into account all these factors, the tax authorities of the Czech Republic decide whether a person is a tax resident.

Basic principles of taxation

The Czech Republic has a progressive taxation system. This means that the tax rate depends on the amount of income. The higher the income, the higher the tax rate.

The main tax in the Czech Republic is personal income tax. It is paid from the income received by an individual in the Czech Republic and abroad.

In addition to income tax, other taxes are also payable in the Czech Republic, including:

• VAT (21%)
• Excise tax
• Real estate tax
• Tax on vehicles
• Income taxation

Income received by an individual in the Czech Republic includes:

• Salary
• Profit from entrepreneurial activity
• Dividends
• Other income received in the Czech Republic

Income received by an individual abroad is also taxed in the Czech Republic if the individual is a tax resident of the Czech Republic.

Income tax rates

The income tax rates in the Czech Republic in 2023 are as follows:

• Up to 48,000 kroner – 15%
• From 48,001 to 120,000 kroner – 20%
• From 120,001 to 250,000 kroner – 25%
• From 250,001 to 500,000 kroner – 32%
• From 500,001 kroner and above – 35%

Benefits and deductions

Income tax can be reduced by the amount of benefits and deductions.

Benefits and deductions that can be applied to the income of Ukrainians in the Czech Republic include:

• Child support benefits
• Disability benefits
• Educational benefits
• Deduction for housing expenses
• Deduction for professional training

Tax declaration

Tax declaration in the Czech Republic is carried out annually. Tax returns can be submitted by natural persons who are tax residents of the Czech Republic.

Tax authorities

Tax authorities are responsible for collecting taxes in the Czech Republic.

There are two main types of tax authorities in the Czech Republic:

• Federal Tax Administration (FSČ)
• Local tax authorities
• The Federal Tax Administration is responsible for the administration of taxes at the federal level. Local tax authorities are responsible for the administration of taxes at the local level.

Taxation in the Czech Republic is quite complicated. To pay taxes correctly, you need to know the basic rules of taxation and have experience in this field.