Czech corporate tax and VAT for foreign owners

Czech tax obligations at a glance

VAT registration: the two Czech turnover thresholds

From 1 January 2025 the Czech VAT Act measures turnover per calendar year; the rolling 12-month test is gone. A business with its seat (sídlo) in Czechia becomes a VAT payer from 1 January of the following year once its turnover for a calendar year exceeds CZK 2,000,000. It can start earlier, from the day after the threshold is exceeded, if it asks for that in an application filed on time. If turnover exceeds CZK 2,536,500 during the year, it becomes a VAT payer from the following day. The registration application is due within 10 working days of exceeding either threshold.

Voluntary registration below the threshold is possible. The tax office may ask for evidence of real activity: contracts, a website, premises.

A foreign company without its seat in Czechia, including one with a Czech branch, has no turnover threshold: it becomes a VAT payer on the day of its first taxable supply with place of supply in Czechia. The exceptions are supplies where the customer accounts for the tax under reverse charge and supplies declared through the OSS scheme. A business established in another EU state can use the Czech thresholds only through the EU cross-border small-business scheme in its home state; that scheme is closed to non-EU companies. Before the first deal we map the supply model: B2B or B2C services, intra-EU goods, imports, digital services, stock held in Czechia.

A legal entity registered for VAT files the control statement (kontrolní hlášení) monthly, within 25 days after the month ends. The VAT period is the calendar month. Quarterly VAT periods are allowed when turnover for the previous year did not exceed CZK 15,000,000 and the payer notifies the tax office by the end of January. The year of registration and the following year stay monthly; for the following year the tax office may allow quarterly filing on a request filed by the end of October of the registration year.

When to file the Czech corporate tax return

For a standard 12-month tax period the Tax Code gives three deadlines:

• 3 months after the end of the period: the general rule;
• 4 months if the return is filed electronically after the three-month mark;
• 6 months if the company has a statutory audit, or a tax adviser or attorney files the return after the three-month mark.

A company with a statutory data box (datová schránka), which every s.r.o. has, must file electronically, so its practical deadline is 4 months. When the last day falls on a weekend or public holiday, the deadline moves to the next working day. Liquidation, mergers and a change of tax period create separate deadlines. An s.r.o. keeps double-entry accounts and files annual financial statements into the collection of documents (sbírka listin) of the Commercial Register. A bookkeeping contract should list every item: accounting, VAT returns and control statements, payroll, annual financial statements and the CIT return.

What changed for Czech R&D in 2026

Act 360/2025 Coll. raised the additional R&D deduction from 100% to 150% of qualifying expenses up to CZK 50 million from 1 January 2026, with 100% for qualifying expenses above that amount. The 110% option on year-on-year growth in R&D spending is abolished. The CZK 50 million cap is shared by the whole group: the controlling entity and every company it controls. The new rules apply to tax periods beginning on or after 1 January 2026, and an unused deduction from those periods can be carried forward for 5 periods instead of 3.

Project documentation requirements were simplified. The advance notice of intent to claim the deduction (oznámení o záměru) is still mandatory, and only costs incurred from the day it is filed count.

The deduction reduces the tax base on top of the ordinary deduction of the same costs; it is never a cash grant. Example: CZK 1 million of qualifying R&D costs in a tax period beginning in 2026 may support an additional deduction of CZK 1.5 million, provided the company has taxable profit and the project meets the statutory conditions. An advertised "200% super-deduction" adds the ordinary expense deduction to the old 100% allowance. For periods beginning on or after 1 January 2026 the combined effect is 250% up to the cap and 200% above it.

Tax residence, CFC rules and dividends for foreign owners

A registered office (sídlo) in Czechia makes the company Czech tax resident. Where it is actually managed matters too: if every decision is taken by a director living in another country, that country may treat the company as its own tax resident. A foreign owner should review:

1. where the company is actually managed and who signs as jednatel;
2. the owner's own country of tax residence and its controlled foreign company (CFC) rules;
3. how money leaves the company: director's fees, dividends, loans, management charges, royalties;
4. beneficial ownership and residence certificates for any treaty rate;
5. transfer pricing records for transactions with related parties.

Dividends paid to a non-resident shareholder bear 15% Czech withholding tax unless a treaty or the EU Parent-Subsidiary Directive gives relief. Dividends to a parent company in the EU, Switzerland, Norway, Iceland or Liechtenstein are exempt when it has held at least 10% for an uninterrupted 12 months. Treaty rates require a residence certificate and beneficial ownership, and since 2025 the Czech–Ukraine treaty, for example, applies the principal purpose test of the OECD multilateral instrument (MLI) to withholding taxes. The shareholder's home country then taxes the dividend under its own rules and may credit the Czech tax. If the owner plans to move, the personal side is a separate question covered in our tax residency guide.

Substance: what makes a Czech company credible

Banks, the Czech tax office and the owner's home tax authority all look at whether the company really operates in Czechia:

• a managing director who actually takes decisions, with minutes to show it;
• a registered address that receives mail, and a data box (datová schránka) for official correspondence;
• contracts, invoices and payments linked to the Czech business;
• staff or contractors matching the workload, and bookkeeping by a Czech accountant.

Services to scope in a written proposal

• Initial tax setup: CIT and VAT registrations, accounting policy, onboarding of bookkeeping through local support.
• Ongoing compliance: accounting, VAT returns and control statements, payroll coordination, annual financial statements and the CIT return.
• Cross-border structuring: holding companies, dividends, management fees, loans, transfer pricing and CFC analysis in the shareholder's country.
• 2026 R&D review: which projects and costs qualify, documentation and the CZK 50 million cap.

Need the company first? See company registration in the Czech Republic. Incorporation, registered address and register changes for foreign founders are also covered by our group's page on setting up a Czech s.r.o. with INNOVA.

Related services

• Company registration in the Czech Republic: new s.r.o. or ready-made company.
• Company registration in Europe: comparing EU countries.
• International company formation: choosing a jurisdiction for the task.
• International accounting services: bookkeeping and reporting abroad.
• Controlled foreign companies (CFCs): the owner's taxes and reporting.

Sources: CzechInvest — taxation system; Czech Financial Administration — VAT registration changes 2025 and its guidance note; Czech Ministry of Finance — 2026 tax changes; Act 360/2025 Coll.; Czech Ministry of Finance — tax treaties in force; Income Taxes Act 586/1992 Coll., VAT Act 235/2004 Coll., Tax Code 280/2009 Coll.. Reviewed 9 October 2026.