Higher taxation of non-residents in company management
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Higher taxation of non-residents
From 1 January 2026, there will be a change in the taxation of the income of members of statutory and supervisory bodies if these natural persons are tax non-residents of the Czech Republic. Until now, if a tax non-resident of the Czech Republic is a member of the statutory/supervisory bodies of Czech companies, their income is always taxed at a withholding tax rate of 15%.
In connection with the amendment to the Income Tax Act, withholding tax will be gradually abolished, and thus, from 1 January 2026, the income of tax non-residents for the performance of their functions will be subject to advance tax, i.e. a tax rate of 15% will be applied up to a specified income, and a tax rate of 23% will be applied above the specified limit. If the annual income exceeds 36 times the average wage, the non-resident statutory representative will now be required to file a tax return in the Czech Republic.
Author: Blanka Knedlová
Revision: Martina Farářová
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