Corporate income tax (CIT) applies to the profits generated by all companies, including branches of foreign companies. Corporate partners in general partnerships (i.e. unlimited) and corporate general partners (i.e. unlimited) in a limited partnership are subject to CIT on their share of the profits in the partnership.
Czech resident companies are required to pay CIT on income derived from worldwide sources. Non-resident companies are required to pay CIT on income sourced in the Czech Republic.
The CIT rate is 19% and applies to all business profits, including capital gains from the sale of shares (if not exempt under the participation exemption regime)
In 2023 through 2025, a ’windfall tax‘ (60% CIT surcharge) applies to excess profits of large banks and companies within the energy sector. The excess profits are calculated on the basis of the average CIT base declared by the company in years 2018 through 2021, and this average CIT base is then increased by 20%. The part of the annual CIT base generated by the company in years 2023 through 2025 that exceeds this increased average CIT base for years 2018 through 2021 is subject not only to the standard CIT of 19% but also to the additional CIT surcharge of 60% (therefore, the total CIT applying to these excessive profits is 79%).
There is a special CIT rate of 15% levied on dividend income of Czech tax resident entities from non-resident entities (unless subject to participation exemption).
A 5% CIT rate applies to income of certain investment funds, and a 0% CIT rate applies to pension funds.
Local income taxes
There are no regional or local income taxes in the Czech Republic.