A taxpayer who paid income to a tax non-resident from funds in the Czech Republic during 2021, provided that such income was not subject to a withholding tax upon payment, is required, pursuant to Section 38da of the Income Tax Act, to submit notification to the tax administrator by 31 January 2022. The notification concerns income that was not taxed in the Czech Republic because it was exempt or because it is not subject to taxation in the Czech Republic under the international taxation treaty – usually dividends, interest on credits and loans, license fees and income from services provided in the Czech Republic.
Such notification must be submitted only if the total income of one kind paid to the given tax non-resident, i.e. recognized as a payable to a tax non-resident, in any calendar month of 2021 exceeded 300,000 CZK; only amounts paid/recognized in the months, in which this limit was exceeded, are included in the notification. Furthermore, income reported under the Act on International Cooperation in Tax Administration (e.g. DAC 6) and income from employment, which constitute a separate tax base under Section 6 (4) of the Income Tax Act, are also excluded from the notification duty.
We will be happy to help you to evaluate whether or not your income is subject to the notification duty and to fill out the notification form for income flowing abroad.
Your LTA team