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Double Taxation Treaties in Czech Republic

Double Taxation Treaties in Czech Republic

Updated on Monday 18th January 2016

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Double-Taxation-Treaties-in-Czech-Republic.jpgDouble taxation treaties are signed between two states in order to prevent the double taxation of income for multinational companies and other types of entities. As a general rule, the income of an individual or a company is taxed in the state in which the above mentioned are tax residents. Until now, the Czech Republic has signed approximately 80 double taxation treaties in which are specified the main regulations applicable to the income of companies carrying operations in the contracting states; our team of Czech lawyers can provide you with information on the double treaties signed so far by the Czech Republic
 

Avoidance of double taxation in Czech Republic 

 
The treaties signed for the avoidance of double taxation specify the method applied by both contracting states in order to eliminate the taxation of income for multinational companies; the agreements also specify the way in which a company can be taxed (what types of incomes fall under the interest of both contracting states) and the place of taxation; our law firm in Czech Republic can present to you further information on this matter.  
 
The Czech Republic uses two different methods for the avoidance of double taxation
 
exemption on incomes with progression (a method applied usually for double avoidance agreements signed before the '80s) - income of a company from abroad is excluded from the tax base imposed by the Czech legislation and, as such, only the income carried on the Czech territory is taxed;
 
ordinary tax credit – at the moment, the ordinary tax credit is applied in most of the double taxation treaties signed by the Czech Republic; the method compares the taxable income of a company in both contracting states. If the taxes on income in the other state are lower than in the Czech Republic, the Czech legislation will require that the foreign company with the main business operations located in the other country to pay the difference in Czech Republic. In the situation in which the taxes are higher in the source state, the company is no longer required to pay a tax on income on the Czech territory
 

Double taxation agreements signed by the Czech Republic

 
Foreign investors interested in opening a company here should know that, at the level of January 2014, the Czech Republic has signed treaties for the avoidance of double taxation with the following countries: Albania, Armenia, Australia, Austria, Azerbaijan, Bahrain, Barbados, Belarus, Belgium, Brazil, Bulgaria, Canada, China, Croatia, Cyprus, Denmark, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Greece, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Korea, Kuwait, Latvia, Lebanon, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Mexico, Moldova, Mongolia, Montenegro, Morocco, Netherlands, New Zealand, Nigeria, Norway, North Korea, Phillipines, Poland, Portugal, Romania, Russia, Saudi Arabia, Serbia, Slovakia, Slovenia, Republic of South Africa, Singapore, South Korea, Spain, Sri Lanka, Sweden, Switzerland, Syria, Thailand, Tunisia, Turkey, Ukraine, United Arab Emirates, United Kingdom, United States of America, Venezuela, Vietnam.
 
If you need further information on the double taxation treaties signed by the Czech Republic, please contact our team of Czech lawyers
 

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