Tax Relief for Non-Czech Tax Residents

Do the new tax reforms mean that expats lose 2,070 CZK per month in tax relief?

The question of whether or not foreign employees will receive the same tax relief as Czech employees has generated some anxiety in the expat community.

This confusion is understandable given that the new tax laws are bewildering to all concerned, Czech and foreigner alike.

When the 2008 tax reforms were introduced, it was initially assumed that foreign nationals working here on a full-time basis would not receive tax relief.

This is not the case.

According to an article posted on the Finance Ministry website (in Czech) on February 7th, non-Czech tax residents (daňoví nerezidenti), from both EU and non-EU countries, will be taxed according to the same conditions as Czech tax residents (daňoví rezidenti).

The Finance Ministry confirmed this information when I contacted them directly.

Non-Czech tax residents are therefore eligible for monthly tax relief of 2,070 CZK.

(The legality of the recent Czech tax reforms have, in fact, been questioned by the EU -- something that's sure to make Brussels even more popular here.) 

Please note that the above ruling applies only to people in full legal employment. Expats working here on a živnostenský list (trade license) are subject to different regulations while foreigners working here illegally are, of course, unable to claim tax relief.

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