21. 6. 2023
Taxpayers in the Czech Republic who have income from outside the country must also pay the appropriate tax on this income. There is an international double taxation treaty on this income, which helps you avoid paying double tax on the same income. However, declaring this income is more complicated and requires careful scrutiny and more steps than taxing traditional domestic income.
The taxpayer must check whether the Czech Republic has the above-mentioned bilateral treaty with the country from which the income originates. If so, all steps are still governed by this treaty. It states which method of elimination of double taxation has been applied and whether his specific income is taxable in the Czech Republic and in what amount. If tax has already been paid abroad, this must be proven by a document from the foreign tax authority. Without a certificate, the estimated amount of income received must be declared to the competent tax office of the Czech Republic. If the taxpayer has income from more than one country, this procedure must be repeated for each country separately.
It is even more complicated if our state does not have such a treaty. In this case, there is double taxation, from which only the income collected is exempt. These fall under the section on dependent activities and functional benefits.