Czech Republic » Taxes

 

Real Estate Tax	Transfer Tax	Income Tax	VAT	Capital Gains Tax

Real Estate Tax

Tax is enforced equally on both types of territory and construction.

The extent of the tax and the process of its adjustment differ consequently to the kind of property for example agricultural, business, etc and the site. The estimate is usually according to the overall site of the property.

As a common principle, the tax is enforced on the possessor of the resource or property. In assured considerations, the tax legal responsibility is changed to the user.

Transfer Tax

When a property is traded and property right is passed there is a property transfer tax of 3% of either the tax evaluation or the sale cost, either is higher. The seller normally gives this tax if not the parties agree otherwise.

Income Tax

The Czech income tax rate for person's financial gain in 2008 is straight, a 15% charge per unit. In 2007 tax on the income of each person was collectable at rates of 12% - 32%.

Corporate income tax in Czech Republic is 21%. There is a cut down tax fee for assured income. The fee of corporation tax is cut down continually to promote financial activity, so that for example, the fee of corporation tax in 1992 was 45% as contrast to the current rate of 21%.

VAT

Housing leases and gross revenue are subject to 5% VAT if the yearly total financial gain tops 1 million Czech Crowns. For housing sales and lettings there are exceptions.

In the majority of the cases, VAT is collectable at a value of 19%. There is a cut down value of 9% that mentions in the main to:

• Supply services of water and heating.
• Nutrients and medicinal drugs
• Newspaper publisher and books publishers
• The doorway for VAT enrolment is CZK 1 million.

The following classes of revenue may be counted within the receipts which are free from VAT:

• Export
• Postal services
• Broadcasting services - radio and television
• Financial institutions (banks, insurance companies)
• Planning and instruction
• Health services
• Welfare services
• Lotteries and games of chance
• Non-profit making institutions

Capital Gains Tax

It is value applying onto the real estate property for five years, other than capital gains tax of 28% is collectable coming down to 24%, equated to the UK where 40% is collectable. If you build the property your own home, two years' residence will be needed to prevent capital gains tax.

Some rules for the Capital gains are as follows:

• Generally, capital gain tax in the Czech Republic is measured as income for companies and people.
• For a person, capital gains tax from sale of principal private home, applied for at least 2 years is tax exempt or, when the dwelling is not used as primary residence, if declared for more than 5 years.