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http://podnikatele.karlovyvary-region.eu/
CORPORATE INCOME TAX
Rendering of services in the Czech Republic
A permanent establishment is the taxable presence of a foreign entity that
carries out business activities in the Czech Republic. A permanent
establishment is not a legal entity; however, it is a taxable entity and
therefore it must be registered for tax purposes with the Tax Office.
Generally, a permanent establishment of a foreign company is created when the company’s employee(s) is (are) assigned to the Czech Republic to render services here for more than 6 months (183 days) in any 12 consecutive calendar months. If a company sends a group of employees that are present in the Czech Republic on the same days, the 183-day limit covers all employees, i.e. the presence of more than one employee on any given day is counted as one day of presence.
Facility located in the Czech Republic
A permanent establishment can also be created when a foreign entity sets up an
office, workshop, production facility, sales outlet or other business facility
(i.e. a fixed place of business) in the Czech Republic. In such a case, a
permanent establishment is created regardless of the 183-day condition.
Dependent agent
A permanent establishment is also created in the case that the foreign entity
operates in the Czech Republic via a dependent agent.
Corporate income tax is levied on income from the worldwide operations of Czech tax residents and on Czech-source income of Czech tax non-residents. Czech tax residents are considered to be entities with their registered office or place of effective management in the Czech Republic.
The tax base is calculated from the accounting profit/loss shown on the
relevant financial statements prepared according to the Czech Accounting Act and
Czech accounting standards. The accounting profit/loss is further adjusted by
nondeductible costs and non-taxable revenues and non-accounting adjustments. As
of 2001, Czech legislation allows taxpayers to change their accounting period
from calendar year to fiscal year and vice versa by notifying the tax authority
about such a change. When changing the accounting period, taxpayers are required
to enter into a transition period that could be shorter or longer than
12 months. For taxpayers whose tax period is a calendar year,** the standard
rate of corporate income tax is 24%** for calendar year 2007,
21% for calendar year 2008, 20% for calendar
year 2009 and 19% for calendar years 2010 and later. For
taxpayers whose tax period is a fiscal year, the rate effective on the first day
of the accounting period is applicable with the expection of the 2007/2008 tax
year, when the 21% tax rate may be used.
source: czech invest
Based on materials published by CzechInvest.
Tax-Deductible Costs
The list of deductible costs is similar to that in other countries. Generally,
costs are tax-deductible if incurred to generate, assure and maintain the
taxable income (for instance depreciation of assets, purchased material and
services, wages and salaries including social security and health insurance
contributions paid by the employer etc).
**
EU Directives**
Four EU directives have been implemented into the Czech tax laws. Most of the
directives have been effective as of the date of accession of the Czech Republic
to the EU on 1 May 2004. The directives include: Parent/subsidiary directive,
merger directive, royalties/interest directive, savings directive.
Non-Taxable Income or Income Not Subject to Corporate Income Tax