Who is required to pay taxes in Czechia and who qualifies for a refund?

The deadline for filing taxes in the Czech Republic is approaching. The last day for submitting an electronic tax return is May 2, while paper submissions are due by April 3. Uncertain if you need to file a tax return? Wondering how much of a refund you can expect to receive?

We spoke with the accountancy firm NeoTax, a company that has developed a handy, English-friendly app for managing and filing your Czech tax returns in selected countries, about the ins and outs of tax compliance in the Czech Republic. Here's what they told us about filing taxes in 2023.

Anyone living and working in the Czech Republic, Czech or foreigner, is required to pay income tax. Tax returns (daňové přiznání) must be filed by those with an active trade license (self-employed), employees with other income in an amount over CZK 6,000, and unemployed persons with a capital gain, rent, or other income in an amount over CZK 15,000 per year. However, not everyone needs to file a tax return.

Self-employed people paying flat tax: Those who are self-employed and met the legal conditions of an annual income of up to CZK 1 million for 2022 and voluntarily entered the flat-rate regime do not need to file a tax return. From this year, that limit has been increased to CZK 2 million. These payers will have fulfilled their tax obligations for 2022 with monthly payments last year of CZK 5,994.

Employees working for one employer: Employees who worked for one employer throughout 2022 and had no other taxable income outside of employment do not have to file a tax return. These employees should ask their employer for an annual tax statement. Employees who worked for one employer only for part of the year and were unemployed for the rest of the year also do not need to file a tax return.

Employees with multiple jobs: Tax returns for the year 2022 must be filed by employees who, in any month worked for several employers at the same time. If an employee worked for several employers during 2022, but successively, then the employee does not have to file a tax return.

Employees with a part-time work agreement: If the gross monthly remuneration from the agreement to perform the work is CZK 10,000 or less, then a 15 percent withholding tax is deducted from the gross remuneration if there is an unsigned tax declaration. Several restrictions apply.

Pensioners: For 2022, state pensions up to 36 times the minimum wage valid on Jan. 1 are exempt from personal income tax (for last year this is up to CZK 583,200). Most pensioners as a result are exempt from taxation. In 2023, pensions up to an annual amount of CZK 622,800 will be exempt from tax.

Part-time students: University students with part-time work do not have to file a tax return if their employment does not overlap with other work.

Those with tax-exempt income: Some income such as inheritance is exempt from income tax automatically. Gifts and real estate are exempt when legal conditions are met. Tax-exempt income is not included in the tax return.

Self-employed who overpaid in 2022: People who overpaid taxes in advance based on high profits in the previous year can get some money back.

Self-employed person entitled to a tax bonus: People who claim benefits for children may find the deductions add up to more than they owe.

Refund of withholding tax for students on a work agreement: Students are eligible for taxpayer discounts, which may add up to more than the taxes that were withheld.

Discount for employee's spouse: An employee in some cases can claim a discount for a spouse who was on parental leave and had income under CZK 68,000.

Rental income: An employee for also had additional income from rental may be eligible for money back due to reductions in the tax base aimed at easing the housing crisis. These reductions include the amount paid for life insurance, pension, and interest on a mortgage.