Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.
Withholding tax rates applied on payments of interest and dividends in Czech Republic are shown in Table 1.
| Dividends | Interest | |
|---|---|---|
| Natural Persons (residents) | 15.0 % | 0.0 % |
| Natural Persons (non-residents) | 15.0 % | 15.0 % |
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Czech Republic signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
Albania
Armenia
Australia
Austria
Azerbaijan
Bahrain
Barbados
Belarus
Belgium
Bosnia and Herzegovina
Brazil
Bulgaria
Canada
China
Croatia
Cyprus
Denmark
Estonia
Ethiopia
Finland
France
Georgia
Germany
Greece
Hong Kong
Hungary
Iceland
India
Indonesia
Ireland
Israel
Italy
Japan
Jordan
Kazakhstan
Korea, Democratic People's Republic of
Korea, Republic of
Kuwait
Latvia
Lebanon
Lithuania
Luxembourg
Macedonia
Malaysia
Malta
Mexico
Moldova, Republic of
Mongolia
Montenegro
Morocco
Netherlands
New Zealand
Nigeria
Norway
Panama (Dec 2013)
Philippines
Poland
Portugal
Romania
Russian Federation
Serbia
Singapore
Slovakia
Slovenia
South Africa
Spain
Sri Lanka
Sweden
Switzerland
Syrian Arab Republic
Tajikistan
Thailand
Tunisia
Turkey
Ukraine
United Arab Emirates
United Kingdom
United States
Uzbekistan
Venezuela
VietnamThere are also several agreements between Czech Republic and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 1 January 2013 of signing the agreement is given in brackets):
Colombia Luxembourg (Mar 2013)
Pakistan (May 2014)
Saudi ArabiaThere are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Czech Republic signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
Andorra (Jun 2014)
British Virgin Islands
Cayman Islands (Sep 2013)
Guernsey
Isle of Man
Jersey
San MarinoThere are also several agreements between Czech Republic and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 1 January 2013 of signing the agreement is given in brackets):
Bermuda
Sint Maarten (Dutch part)Czech Republic signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
the Czech Republic has signed bilateral agreements with 57 jurisdictions to automatically receive information:
Andorra
Argentina Australia Austria Belgium
Bonaire, Saint Eustatius and Saba Brazil Bulgaria Canada China Colombia Croatia Cyprus Denmark Estonia
Faroe Islands Finland France Germany
Gibraltar Greece
Greenland Guernsey Hungary Iceland India Ireland Isle of Man Italy Japan Jersey Korea, Republic of Latvia
Liechtenstein Lithuania Luxembourg Malaysia Malta
Mauritius Mexico
Monaco Netherlands New Zealand Norway Poland Portugal Romania San Marino
Seychelles Slovakia Slovenia South Africa Spain Sweden Switzerland United Kingdom
Uruguaythe Czech Republic has signed bilateral agreements with 68 jurisdictions to automatically send information:
Andorra
Anguilla Argentina Australia Austria Belgium
Belize Bermuda Bonaire, Saint Eustatius and Saba Brazil British Virgin Islands Bulgaria Canada Cayman Islands China Colombia
Costa Rica Croatia Cyprus Denmark Estonia Faroe Islands Finland France Germany Gibraltar Greece Greenland Guernsey Hungary Iceland India Indonesia Ireland Isle of Man Italy Japan Jersey Korea, Republic of Latvia Liechtenstein Lithuania Luxembourg Malaysia Malta Mauritius Mexico Monaco
Montserrat Netherlands New Zealand Norway Poland Portugal Romania
Saint Vincent and The Grenadines
Samoa San Marino Seychelles Slovakia Slovenia South Africa Spain Sweden Switzerland
Turks and Caicos Islands United Kingdom UruguayForeign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
Czech Republic has FATCA agreement with the U.S. in effect since 04 August 2014 (Intergovernmental Agreement Model 1). Financial institutions operating in Czech Republic are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Czech financial accounts hold in U.S. financial institutions will be reported to Czech authorities.
