Çek Cumhuriyeti - emlak vergisi rehberi

Corporate income tax

The standard rate of corporate income tax (CIT) is 24% for 2006 (previously 26%) for resident companies and non-resident companies with a permanent establishment or with a branch in the Czech Republic. A special rate of 5% applies to the taxable profits of investment funds.

Capital gains

Capital gains realised on the sale of Czech real estate are generally liable to corporate income tax at 24% for 2006 (previously 26%).  Where an asset is sold to the lessee on termination of an operational or financial lease, previous rental payments made by the lessee will be tax-deductible for the lessee (subject to certain conditions stipulated in the Czech Income Taxes Act).

Capital losses cannot be generated on the sale of land and a tax-deductibility of purchase price is limited to the amount of sale proceeds on the sale.

The tax consequences of the sale of shares in a property holding company depend on the legal form of the company and on the seller’s status.  Non-residents are generally outside the scope of Czech taxation.  However, a non-resident selling to a Czech resident falls within the scope of Czech taxation. However where a tax treaty exists any gain may be exempted from Czech taxation.

Capital gains realised on disposal of a Czech property company by an intermediate Czech holding company are subject to CIT at 24% for 2006 (previously 26%).  However, losses realised by an intermediate Czech holding company on the disposal of shares in a joint stock company are not tax deductible except in limited circumstances on the sale of shares in a joint stock company.  Losses realised on the sale of shares in a Czech limited liability company or on the sale of a share in a limited partnership are not tax deductible.

Property tax

Property tax of 0.25% to 0.75% is charged on plots of land registered in the “Czech Real Estate Cadastre”.  Property tax on land for which planning permission has been granted is charged at CZK 1/m2.

Building tax is calculated at CZK 0.75/m2 to 10/m2 (depending on the location of the building and the use to which it is put) according to the registered ground area of the building.

Property tax is reportable to the tax authorities by 31 January each year on a calendar year basis and is generally payable in advance via quarterly payments.

Property transfer tax

Property transfer tax is charged at 3% on the higher of the agreed purchase price or the officially assessed value of the property being transferred.  However, an exemption may be available in certain circumstances.  The seller usually pays the tax, while the purchaser acts as guarantor.

VAT

The majority of goods and services are chargeable to VAT at the standard rate of 19%.  A reduced rate of 5% applies to the sale of residential property within 3 years of acquisition or approval for residential use, the supply of construction services related to residential housing, and supply of heating and air conditioning.

Supply of goods to another EU Member State may be “zero rated”.  However this is not usually applicable to the supply of real estate.  Leasing of real estate is VAT exempt unless the lessor opts to apply VAT, as is the transfer of real estate more than 3 years from acquisition or approval for use.

VAT must be charged by a taxable entity (incorporated in or having a place of business or fixed establishment in the Czech Republic) if (i) its turnover in the previous 12 calendar months exceeded CZK 1 million, or (ii) it provides certain supplies listed in the Czech VAT Act.


The above is for general information purposes only. It is not intended to be comprehensive or to provide any specific tax advice.