An individual is considered a resident for tax purposes in the Czech Republic if either of the following conditions is met:
- The individual has a permanent home in the Czech Republic (either an owned or rented residence where the individual has the intention to live permanently). The possession of a long-term visa does not, by itself, make an individual a tax resident in the Czech Republic.
- The individual is present in the Czech Republic for 183 or more days in a calendar year. This includes the days of arrival and departure.
An individual not meeting the conditions of Czech tax residency is considered Czech tax non-resident. Non-residents present in the Czech Republic for less than 183 days in any 12-month period and working for a foreign employer with no taxable presence in the Czech Republic are not subject to Czech income tax on employment income from work performed in the Czech Republic (Czech-source income).
Generally, the following individuals are subject to Czech tax on Czech-source income, irrespective of the number of days of physical presence in the country:
- All employees of a Czech company, including all branches.
- Expatriate assignees whose salary costs are borne directly by or recharged to a Czech entity (or a permanent establishment [PE]).
- Statutory representatives or members of the Board of Directors or Supervisory Board of Czech companies.
If the individual is considered resident in more than one country, the final tax residency is determined based on the applicable double tax treaty (DTT). Most DTTs define an individual as a Czech tax resident if one has a permanent home in the Czech Republic, a strong personal and/or economic connection to the Czech Republic, a habitual place of residence in the Czech Republic, or Czech citizenship. Please see the Foreign tax relief and tax treaties section for a list of DTTs.