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Business Setup and Support in the Czech Republic TAX ADVICE IN THE CZECH REPUBLIC

Taras Miroshnychenko

Head of International Corporate Law and Fintech Practice

E-mail

miroshnychenko@prikhodko.com.ua

Phone numbers

Expert in fintech, crypto, and international corporate law with over 20 years of experience. Specializes in crypto licensing (VASP/CASP), iGaming business support, and international structuring, asset protection, and OSINT analytics for risk assessment and due diligence.

TAX ADVICE IN THE CZECH REPUBLIC

As we can see from the practical experience of European colleagues and Ukrainians who conduct their activities in the Czech Republic, the Czech Republic has long established itself as a stable state with a transparent tax system, a developed economy and a favorable location in the heart of Europe.

Therefore, entering European markets is always a challenge and an opportunity at the same time. It is not surprising that many Ukrainian entrepreneurs and individuals choose the Czech Republic for business registration, residence or expansion of economic activity. In this article, we want to consider why this trend is happening.

We, as specialists of the Law Firm “Prikhodko and Partners”, provide professional advice on tax issues in the Czech Republic – both for individuals and businesses, and we also offer all possible legal related services, starting from consulting planning for the relocation of an individual and/or business and ending with the physical implementation of tasks from our clients, and, as usual, we offer not only qualified assistance, but also guarantee speed, reliability and full compliance with the legislation of the relevant country.

Let’s take a closer look at why tax consulting in the Czech Republic is a necessity.

Even if you pay your taxes honestly, the Czech tax system can be opaque to foreigners.

We focus on the main reasons:

Different taxation regimes for legal entities and individuals;
Frequent legislative updates, especially in the context of European directives;
Tax obligations for non-residents, which are often not realized;
Local reporting specifics, including filing declarations, VAT reporting and interaction with financial authorities.

As a result, without proper advice, it is easy to make a mistake that could cost you fines, loss of tax benefits, or even restrictions on your activities.

Thus, let’s analyze in more detail what tax issues most often concern clients?

As our experience shows, among the main requests from clients and/or potential clients:

What tax status will my business have in the Czech Republic?
What tax rates apply to enterprises, sole proprietors, and freelancers?
Is there a risk of double taxation with Ukraine?
How to properly file tax returns?
Do I need to register as a VAT payer and under what conditions?
How to optimize the tax burden on legal grounds?

Therefore, we can conclude that each of these issues requires an individual approach.

We pay special attention to the main taxes in the Czech Republic: an overview for non-residents and businesses:

Corporate Income Tax (DPPO) — the standard rate is 19%. Special conditions apply to foreign companies or branches.
VAT (DPH) — basic rate 21%, reduced rates 15% and 10% (for certain categories of goods and services). VAT registration is mandatory for turnover of 2 million CZK (approximately 80 thousand euros) per year.
Personal Income Tax (DPFO) — the standard rate is 15%, but can increase to 23% if the established income threshold is exceeded.
Social and medical contributions — mandatory for both employees and self-employed persons.
Property and real estate tax, environmental fees, local taxes — may vary depending on the region.

It will also be useful: OPENING A BANK ACCOUNT IN THE CZECH REPUBLIC

Who needs tax advice in the Czech Republic?

In most cases this is necessary for individuals, which:

They work in the Czech Republic as employees;
Moved to permanent residence;
Have income from several countries (for example, from Ukraine and the Czech Republic);
They receive passive income: rent, dividends, investments.

For entrepreneurs and companies, which:

Register a business in the Czech Republic;
Work through the self-employment model (OSVČ);
Have employees or contracts with counterparties in the Czech Republic;
They plan to optimize the tax burden;
Need help with filing reports or passing a tax audit.

At first glance, the system may seem simple, but in practice, its application raises many questions, especially for those who have no experience working with the Czech tax authorities.

Therefore, it is important to know and remember that tax liabilities may arise even in the case of temporary stay in the Czech Republic, if you receive income on its territory.

We would like to draw your attention to and emphasize an important, relevant question – especially in today’s realities, when more and more Ukrainians are moving to the Czech Republic or doing business here, working remotely, buying real estate or simply receiving income.

So, here is why tax advice in the Czech Republic is extremely important – including for Ukrainians:

Another tax system
Resident status matters
Avoidance of double taxation
Risks for freelancers, IT professionals and the self-employed
Real estate investors and passive income
An entrepreneur in the Czech Republic is not the same as an individual entrepreneur in Ukraine
Security, trust, reputation

Conclusion

So, as a result, the Czech tax environment, despite its stability, requires a careful and professional approach – especially for foreigners, entrepreneurs and investors.

Czech tax legislation, despite its logic and structure, contains many subtleties that are difficult to take into account without appropriate experience, and the work of tax authorities and interaction with them requires separate experience.

Therefore, not only the amount of your expenses, but also the legality of your activities, the preservation of your financial reputation and further development opportunities depend on a correct understanding of tax regulations.

How can we help with tax advice in the Czech Republic?

Law firm “Prikhodko and Partners” With many years of experience, it provides comprehensive services on how to properly structure your tax obligations in the Czech Republic, as well as plan a physical relocation and/or your business, where to start, whether you need temporary protection status, how to navigate double taxation issues, and what to expect in the medium term.

Is company registration possible without a personal visit to the Czech Republic?

Yes. The procedure is fully adapted for remote launch. All legal actions are performed on the basis of a power of attorney, notarized and, if necessary, apostilled in your country.

Why shouldn't you use a share capital of 1 crown?

Although the law allows a share capital of 1 crown, minimal capital reduces trust from banks and European counterparties, and also creates problems when passing banking compliance (AML). To confirm the seriousness of intentions, it is recommended to contribute an amount of at least 10,000 – 100,000 crowns, which can be used for the company’s operational needs after opening the account.

What is the difference between an s.r.o. and a sole proprietor (OSVČ)?

Apart from the issue of limited liability, the key difference lies in taxation. OSVČs in the Czech Republic are eligible for a single tax regime (paušální daň), which in 2026 requires a fixed monthly payment of between 9,162 and 27,139 crowns, depending on income. However, the status of a sole proprietor limits business scaling and complicates interaction with large B2B clients, who prefer to work with VAT payers in the form of an s.r.o.

Successful cases on the topic: