In 2025, new tax regulations came into effect in the Czech Republic. The minimum wage has increased, VAT thresholds have been adjusted, and new requirements for entrepreneurs and self-employed individuals have been introduced.
The Czech tax system is based on the general principles of the European Union, yet, like in any country, it has its own specifics.
In this article, we provide up-to-date information about taxes in the Czech Republic for 2025 — what has changed, which taxes are currently in force, and how to navigate the system without unnecessary confusion.
How the Czech Tax System Works
Taxes in the Czech Republic are divided into two main categories: direct and indirect.
Direct Taxes
Direct taxes are paid directly to the government. They are based on the taxpayer’s income, property, or other assets.
As of 2025, the following direct taxes apply in the Czech Republic:
- Personal income tax: 15% on income up to a specified threshold and 23% on income exceeding that limit
- Corporate income tax: 21%
- Real estate tax: applicable to buildings and land, with local coefficients
- Road tax: for owners of freight vehicles
- Tax on income from participation in foreign entities: 15%
- Tax on investment fund income: 5%
- Broadcasting fee: a mandatory fee for households and businesses owning a TV or radio
- Municipal dog ownership fee: amount depends on the city or district
- Other minor local taxes
Indirect Taxes
Indirect taxes are typically included in the price of goods and services rather than paid directly. While the end consumer ultimately bears the cost, it is the seller or service provider who remits the tax to the state. These taxes are not directly tied to the taxpayer’s income but do affect the final price of products and services.
In 2025, the following indirect taxes apply in the Czech Republic:
- Value-added tax (VAT): standard rate of 21%, reduced rate of 12%
- Excise duties: applied to alcohol, tobacco, fuel, and other excisable goods
- Environmental tax: imposed on electricity, natural gas, coal, and other energy sources
- Customs duties: apply to goods imported into the European Union
- Windfall tax: a temporary measure affecting banks and energy companies, valid until the end of 2025
- Fees for organizing entertainment and sporting events, among others
Now that you have an overview of the tax structure, let’s take a closer look at the main types of taxes and the applicable rates and conditions for 2025. For convenience, we’ve grouped them into three main categories.
Group 1 – Income and Profit Taxes
Personal Income Tax
Personal income tax in the Czech Republic applies to all individuals earning income within the country — both residents and non-residents, provided they stay in the country for more than 183 days a year or receive income from Czech sources.
In 2025, the following rates apply:
- 15% on annual income up to CZK 1,676,052
- 23% on the amount exceeding that threshold
The same rates apply to sole proprietors. They may also opt for a flat tax regime (paušální daň). Entrepreneurs are also required to make contributions to the pension system and public health insurance. Health insurance in the Czech Republic is mandatory, even for those without income.
Corporate Income Tax
Companies registered in the Czech Republic, as well as foreign companies with a permanent establishment in the country, must pay corporate income tax on profits derived from their activities.
In 2025, the standard corporate tax rate is 21%. A reduced rate of 5% applies to qualifying investment funds.
Profits are calculated as the difference between revenues and expenses, based on proper accounting records. Tax returns must be submitted by April 1 of the year following the tax period, or by May 1 if filed electronically. If the company is subject to a statutory audit or files through a tax advisor, the deadline is extended to July 1.
Tax on Income from Participation in Foreign Entities
Both legal entities and individuals receiving dividends from participation in foreign structures must report these earnings in their Czech tax base.
Such income is generally taxed at 15%, with the possibility of a foreign tax credit. In certain cases, tax exemption may apply.
Tax on Investment Fund Income
An investment fund may qualify for the reduced 5% corporate tax rate if it meets the definition of a “qualified investment fund” under § 17b of the Income Tax Act. These include:
- Investment funds whose shares or units are traded on a regulated European market
- Open-ended mutual funds
- Investment funds and sub-funds of joint-stock companies with variable capital (SICAV) that invest at least 90% of their asset value in eligible financial instruments
Windfall Tax
From 2023 through 2025, the Czech Republic has implemented a temporary windfall tax on excess profits earned by energy companies, large banks, and entities in the oil and gas sector.
The rate is 60% on profits exceeding the average levels from 2018 to 2021. This measure is intended to redistribute extraordinary crisis-related earnings and support the state budget.
The tax only applies to companies exceeding specific financial thresholds and does not automatically affect small or medium-sized enterprises.
Group 2 – Property and Local Taxes
Real Estate Tax
All property owners in the Czech Republic are required to pay real estate tax, regardless of their citizenship or residency status.
Taxable properties include buildings, apartments, commercial premises, land plots, as well as agricultural and forest land.
The amount of tax depends on the type and size of the property, its location, and coefficients set by local municipalities.
The deadline for payment is May 31. If the amount exceeds CZK 5,000, payment may be made in two instalments.
Road Tax
As of 2025, road tax applies only to freight vehicles with a permitted gross weight of 12 tons or more.
For these vehicles, the tax is paid as a lump sum for the entire year.
The tax return must be filed electronically by January 31 of the year following the taxable period. The payment deadline is also January 31.
Public Radio and Television Fee
As of May 1, 2025, new rules on mandatory fees for access to public broadcasting services came into force in the Czech Republic.
Every household that owns a device capable of receiving a television or radio signal is required to pay the fee. This includes not only TVs and radios, but also internet-enabled devices such as smartphones, tablets, and computers.
Legal entities are also subject to the obligation if they employ more than 24 people.
The monthly rates from May 2025 are:
- CZK 150 per month for television
- CZK 55 per month for radio
Payment can be made monthly, quarterly, or annually. For households, the fee is calculated per household (not per device); for companies, it is based on the number of employees.
Exemptions apply to:
- Households with income below 2.15 times the subsistence minimum
- Foreigners without permanent or long-term residence in the Czech Republic
- Legal entities with 24 or fewer employees
Fees are collected by Česká televize (Czech Television) and Český rozhlas (Czech Radio). Legal entities calculate the amount based on the number of employees, or the number of vehicles in the case of transport companies.
Companies are required to report their number of employees by June 30, 2025, in order to calculate the amount due. Non-exempt companies will begin paying the fee from July 1, 2025.
Important:
If you are a legal entity or sole proprietor who previously paid the radio fee but will be exempt from July 1, 2025, you must notify Czech Radio. You can do this via the online form in your taxpayer portal or by sending a message from your registered email address.
Municipal Dog Ownership Fee
Dog owners are required to pay an annual fee set by the local municipality.
The amount and payment procedure vary depending on the city or district of residence. The average fee ranges from CZK 200 to CZK 1,500 per year per dog.
Certain groups may qualify for exemptions or reduced rates.
Group 3 – Indirect Consumption Taxes
Value-Added Tax (VAT)
As of 2025, two VAT rates apply in the Czech Republic. The standard rate is 21%. A reduced rate of 12% applies to food products, medicines, public transportation, hotel services, and a range of other socially significant goods and services.
The obligation to register as a VAT payer arises when the annual turnover exceeds CZK 2,000,000. In this case, VAT registration takes effect from the beginning of the following year. However, if the turnover exceeds CZK 2,536,500, registration becomes mandatory on the day after the threshold is surpassed.
Certain goods and services are exempt from VAT in the Czech Republic, including: medical, educational, financial, insurance, social, and postal services; rental and sale of real estate; public broadcasting services; activities of non-profit organizations; exports (subject to specific conditions); and the sale of books and some printed publications.
Some exemptions come with the right to deduct input VAT, while others do not.
VAT returns must be filed monthly or quarterly, depending on turnover. The deadline for submission is the 25th day of the month following the taxable period.
Excise Tax
Excise tax applies to specific categories of goods — such as alcoholic beverages, tobacco products, mineral oils, and fuel.
As of 2025, excise rates on alcohol have increased by approximately 10%, and on tobacco products by 5%. Excise duties have also been introduced on electronic cigarettes, nicotine pouches, and similar products.
The taxpayer is the manufacturer or importer, who must register and remit the excise tax to the state upon the production or import of taxable goods.
Environmental Tax
Environmental tax applies to types of energy and fuel that are harmful to the environment. In the Czech Republic, this includes electricity, natural gas, and solid fuels.
The tax is included in the price and collected through the energy supplier. It is remitted to the state by the producer or supplier, while the final cost is passed on to the consumer as part of the energy bill.
Rates depend on the type and quantity of the resource. For example:
- Electricity: CZK 28.30 per 1 MWh
- Natural gas (used as motor fuel): CZK 264.80 per 1 MWh
Customs Duties
Customs duties are levied on goods imported from countries outside the European Union. The amount of duty depends on the type of goods, their value, and country of origin.
The importer — whether an individual or a business entity — is responsible for paying the duty. For individuals, the duty-free import threshold is EUR 150.
Local Tax on Entertainment and Sporting Events
This is a local fee charged to organizers of paid events, including cultural, sports, trade, and promotional events.
The tax rate ranges from 5% to 20% of the ticket price and depends on the type and nature of the event as well as the specific municipality.
Exemptions apply to charitable and certain educational events, as well as depending on the size of the venue.
Social and Health Insurance Contributions
Let’s also take a closer look at contributions that are not classified as taxes but still affect most residents of the Czech Republic.
In the Czech Republic, all working individuals are required to pay mandatory contributions to social and health insurance. This applies to both employees and the self-employed. Health insurance is also mandatory for individuals without income.
Employees
For individuals employed under a standard employment contract, 6.5% of their salary is withheld for social insurance and 4.5% for health insurance. In addition, the employer contributes 24.8% to social insurance and 9% to health insurance. The total burden on the wage fund is 44.8%.
Self-Employed Persons (OSVČ)
Self-employed individuals pay contributions on their own. In 2025, the minimum monthly contributions are:
- CZK 4,759 for social insurance (for primary activity)
- CZK 3,144 for health insurance (for primary activity)
- CZK 1,496 for health insurance (for secondary activity)
As an alternative, self-employed persons can opt into a simplified scheme (paušální daň), where income tax and both contributions are combined into one fixed monthly payment. The amount depends on annual turnover.
For 2025, the following levels apply:
First Tier — CZK 8,716 per month
Includes: CZK 100 in income tax, CZK 5,473 in pension insurance, and CZK 3,143 in health insurance
Annual turnover limits:
- Up to CZK 1 million, regardless of business type
- Up to CZK 1.5 million, if at least 75% of the income qualifies for lump-sum expense deductions at 80% or 60%
- Up to CZK 2 million, if at least 75% of the income qualifies for an 80% deduction (e.g. craft or agricultural activities)
Second Tier — CZK 16,745 per month
Includes: CZK 4,963 in income tax, CZK 8,191 in pension insurance, and CZK 3,591 in health insurance
Annual turnover limits:
- Up to CZK 1.5 million, regardless of business activity
- Up to CZK 2 million, if at least 75% of the income qualifies for an 80% or 60% expense deduction
Third Tier — CZK 27,139 per month
Includes: CZK 9,320 in income tax, CZK 12,527 in pension insurance, and CZK 5,292 in health insurance
Annual turnover limit:
- Up to CZK 2 million for all categories of entrepreneurs
Conclusion
This article has provided an overview of the main taxes and mandatory contributions in effect in the Czech Republic in 2025. The information is for general guidance only and should not be used as a substitute for calculating or paying specific taxes.
Each tax has its own conditions, exemptions, allowances, and nuances that may depend on the type of income, taxpayer status, or the form of business activity.
If you want to ensure your tax filings are accurate or are unsure how to meet your obligations, we recommend contacting DoMyTax. Our experts will help you navigate the reporting process, avoid penalties, and stay fully compliant with Czech tax laws.
💬 Chat with us online: DoMyTax
📞 Call us: +420 228 229 092
📧 Email us: info@domytax.cz
📍 Visit our office: Vista House, Na Pankráci 30, 140 00 Nusle, Prague
Forget about reporting complexities – leave it to the professionals!
