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Dear readers,

Deadlines for filing personal income tax returns for 2022 are near. This article brings a summary of information related to the returns’ filing, focusing exclusively on the Czech Republic’s residents.

Who Is Obliged to File a Tax Return?

A payer whose income exceeded CZK 15,000 (unless the income was tax exempt or tax on it was withheld) is obliged to file an individual income tax return for the calendar year 2022. The only exception involves employees who only had income from a dependent activity in 2022 (from one employer / from more than one employer, one after another, if they signed a tax declaration with such employers, the “pink form”) and had no other income above CZK 6,000. Such employees can ask their employer for an annual tax settlement; details on this are available here.

Please beware that for example if your private life assurance / pension insurance terminated in 2022 and related indemnity was paid, you may also be obliged to file a tax return in such case. We therefore recommend consulting your situation with a tax advisor.

What Are the Deadlines for Filing a Tax Return for 2022?

For 2022, the tax return must be filed within three months (within 3 April 2023 for 2022), within four months in case of electronic filing (within 2 May 2023 for 2022), or within six months in case of filing by a tax advisor (within 3 July 2023 for 2022).

Please be advised that effective as of 1 January 2023, the category of persons for whom data boxes are established has been expanded by natural persons engaged in an entrepreneurial activity – these persons are obliged to file their tax return electronically. If the obligation to file the return electronically does not apply to you, the return can be filed in person or sent by post, which however does not exclude the option of filing the tax return electronically (without this being a duty).

The tax return shall be filed with a local office of the Tax Office with local competence referring to the taxpayer’s place of residence (i.e. permanent residence in the territory of the Czech Republic).

Shortly About Completing the Tax Return

Tax on personal income applies to income from dependent activities (Section 6), income from independent activities (Section 7), income from capital assets (Section 8), income from leases (Section 9), and other income (Section 10).

Income from dependent activities (Section 6) is presented on rows 31 to 36 in the tax return. Other income (Sections 7 to 10) can be reduced by associated expenses (if permitted by law for each such type of income), and the difference constitutes the partial tax base to be filled in on rows 37 to 40. The resulting tax base for individual income is the total of all partial tax bases (row 42 of the tax return).

Non-taxable portions of the tax base can be applied in the tax return; as a result, you can reduce the tax base for example by gifts, interest on a mortgage credit (or a loan from building savings) to provide for your own housing needs, payments to pension insurance, payments to life assurance, or trade union contributions, provided the terms and conditions defined by law have been met.

Once the individual income tax is calculated (15% for the tax base up to the amount of CZK 1,867,728; 23% above that amount), the basic discount for a taxpayer is applied (in the amount of CZK 30,840 for 2022), and the calculated tax is reduced by this amount.

In addition to this, the following relieves can be applied: a relief for a spouse (if the terms and conditions defined by law have been met), the basic/advanced disability relief, a relief for holders of the “especially seriously disabled person with a guide” card, a relief for a student, or a relief for a placed child, all up to the maximum amount of the calculated tax.

If you have children, you can also use a tax advantage for a dependent child living in a household with you (this can be applied in case of minors or adults up to 26 years of age, if such child is a student).

In the tax return, you fill in total tax advances that were withheld by your employer in 2022 (where you have income from dependent activities) and advances paid for activities other than the dependent activities, if such obligation applied to you in 2022.

Payment of Tax

If the result of your tax return is a tax arrear, such arrear has to be paid to an account of the tax administrator with local competence no later than on the final date of the deadline for the tax return’s filing. The payment can be made via wire transfer, in cash with a Tax Office, or with the use of a postal order.

In case of a tax overpayment, you have to file an application for the overpayment’s reimbursement with your tax administrator; this application is part of the tax return’s form on page 4. The tax administrator will send you the overpayment within 30 days from the deadline for the tax return’s filing.

Please remember that a tax return also includes attachments that also have to be filled in (e.g. an enclosure to income from dependent activities). In addition to this, the employer’s confirmation of taxable income must be attached (if you have income from dependent activities) or all confirmations, based on which you apply non-taxable portions of the tax base (gifts, interest, etc.). If you apply a tax advantage due to having a child, you also have to attach a confirmation of your spouse’s employer or an affidavit that your spouse had not applied such advantage.

Last but not least, if you received income in 2022 that is exempt from income tax under law and did not exceed the amount of CZK 5,000,000, you are obliged to file a notification of such income within the deadline for the tax return’s filing.

The information presented above is a short summary of what has to do with the filing of an individual income tax return for 2022, rather than an exhaustive listing. You can find summarised information on the website of the Financial Administration.

Do you have for example income from abroad and are unsure as to how to deal with it in your tax return? We will be happy to assist you with this as well as any other issues. Please feel free to contact us.

Tomáš Brůček                                                 Michaela Kozminská
brucek@edmutilitas.cz                                    kozminska@edmutilitas.cz