Czech Republic Corporate Tax Guide

Czech Republic corporate income tax (daň z příjmů právnických osob) applies a standard rate of 19%. Reduced rates include 5% for investment funds and 0% for pension funds. The R&D super-deduction allows 200% deduction of qualifying R&D costs. The patent box regime provides an effective tax rate of approximately 5% on qualifying IP income. Thin capitalization rules limit interest deductibility to 30% of EBITDA. All amounts in CZK.

Czech corporate tax is governed by Act No. 586/1992 Coll., on Income Tax, and is administered by the Financial Administration. For related guidance, see our Personal Tax Guide →, VAT Guide →, and Investment Income Guide →.

Corporate Tax Rates 2026

Standard rate: 19% on taxable profits (accounting profit adjusted for tax purposes). This applies to most companies including s.r.o. (limited liability companies), a.s. (joint-stock companies), and branches of foreign companies.
Investment funds: 5% — applies to investment funds, mutual funds, and similar collective investment vehicles (podílové fondy, investiční fondy). This reduced rate makes the Czech Republic attractive for fund domiciliation.
Pension funds: 0% — pension management companies and supplementary pension savings funds benefit from a full exemption.

R&D Super-Deduction (Výzkum a vývoj)

200% deduction: Czech tax law allows an additional 100% deduction of qualifying R&D costs on top of the regular 100% expense deduction, resulting in a total 200% deduction. For example, CZK 1,000,000 of R&D costs reduces taxable income by CZK 2,000,000.
Qualifying costs: Personnel costs of R&D employees (wages, social and health insurance), depreciation of R&D equipment and buildings (used at least 50% for R&D), operating costs (materials, energy), and external R&D services purchased from certified research organisations.
Conditions: The R&D project must be documented in advance with a project plan (projekt výzkumu a vývoje) specifying objectives, methodology, timeline, and budget. The deduction is claimed in the annual tax return and can be carried forward for up to 5 years if the current year's tax base is insufficient.
Grant interaction: If R&D costs are covered by a grant, the grant amount reduces the base for the super-deduction. The deduction cannot be claimed on costs already fully reimbursed by public grants.

Patent Box (Režim pro patentové příjmy)

Effective rate ~5%: Qualifying income from patents and other IP rights is taxed at an effective rate of approximately 5%. This is achieved by allowing a deduction of 70% of qualifying IP income from the tax base, leaving 30% taxed at 19% (30% × 19% = 5.7% effective rate).
Qualifying IP: Patents granted by the Czech Industrial Property Office, the European Patent Office, or certain other national patent offices. Supplementary protection certificates also qualify.
Conditions: The taxpayer must have been substantially involved in the development of the IP (not merely acquired it). The patent box applies only to income from patents developed after 1 January 2014 (or acquired and further developed). The regime is aligned with OECD nexus approach requirements.

Thin Capitalization Rules (Nízká kapitalizace)

Interest deduction limit: Net interest expense is deductible up to the higher of: (a) 30% of EBITDA (tax EBITDA), or (b) CZK 80 million. This implements the EU ATAD directive (Interest Limitation Rule).
Related-party debt: In addition to the EBITDA test, interest on loans from related parties (including shareholders) must meet the arm's length principle. If the interest rate exceeds the market rate, the excess is non-deductible.
Exemptions: Stand-alone entities (not part of a group) may be exempt if they have no related-party debt. Certain long-term infrastructure projects and financial institutions have specific rules.

Transfer Pricing (Převodní ceny)

Arm's length principle: All transactions between related parties must be conducted at arm's length prices. The Czech Republic follows OECD Transfer Pricing Guidelines.
Documentation requirements: Taxpayers must maintain transfer pricing documentation (master file, local file, and country-by-country reporting for large groups). The documentation must be prepared by the tax return filing deadline and submitted within 15 days of a tax authority request.
Penalties: If the tax authority adjusts transfer prices, the underpaid tax is subject to interest (repo rate + 14%) and potential penalties of up to 20% of the tax difference.
APA programme: The Czech tax authority offers Advance Pricing Agreements (APAs) for taxpayers seeking certainty on transfer pricing methodologies. APAs can cover up to 5 years.