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Right of residence

Business licence, labour permit

Right of land acquisition

Tax liability

Social insurance obligation

 

Right of residence

 

Generally each citizen of an EU-member has unlimited right of residence in the Czech Republic. At a stay longer than 3 months a registration at the foreigner police – the registration office responsible for foreigners – is required. This is meant as a registration only, not as a permission request. Citizen of other states has to apply for a residence permit.

Besides the simple registration at the foreigner police EU-citizen may also file a so-called application for permitted residence. This is optional but from some other authorities required. In addition to a confirmation of a residence in Czech Republic and a health insurance in your home country it requires also a statement on the purpose of your stay in Czech. In the text of law are no valid purposes specified, which basically allows any purpose. In practice has proven itself the following: study, employment, running a business, retirement, secondary residence. After permission the applicant will get a “Passport on permitted residence for citizen of EU-members”. This passport is amongst others required for land acquisition (see Right of land acquisition). It will be issued for 5 years and can be either extended after 5 years or the pass-holder applies for a permanent permit of residence. In this case the applicant would need to change his primary place of residence from his current home country to Czech.

 

Business licence, labour permit

 

Same as for residence EU-citizen enjoy also an unlimited right of holding a business licence or a labour permit. In case of an employment usually the employer is taking care on all the formalities. For business registration is an application form, an evidence of residence in Czech and a translated criminal record from your home country – not older than 3 months – needs to be provided at the trade office. For so-called non-free-trades in addition qualification evidence is required.

 

Right of land acquisition

 

For all EU-citizen the Czech real estate market has been accessible from 1/5/2009 w/o any limitation for buildings, construction and other lots. For farmland and forests limitations has been dropped by 1/5/2011.

 

Tax liability

 

The Czech Republic has signed a double tax agreement with all EU-members. You should contact your local tax office for the country specific regulations. Simplified you can say for most of the EU-members: a natural person is subject to tax at the place of its usual residence or its centre of living. The tax regulation of that country will than apply. The evidence where a certain person has its centre of living or usual residence is hard to prove, that’s why the tax office usually follows the tax payers statements if there are not very clear proof for a wrong statement. Practically said the tax payer can widely choose the place of its tax obligation by himself.

 

In Czech the following flat tax rates are currently valid:

 

15% for natural persons at an allowance of 24,840 Kč per tax payer und 13,404..17,004 Kč per child (1.,2…. child)

plus 7% „millionaire tax“ at annual income above ca. 50.000 €

 

19% for legal persons

 

Beginning 2009 12.5% for natural persons and 20% for legal ones, 2010 19% for legal persons.

 

For pensioners counts an allowance of 331,200 Kč – even for pension paid in another country! But just if ancillary income does not excel 840,000 Kč.

Social insurance obligation

 

Social insurance obligation for persons with a limited residence permit applies only for employees, not for self- or non-employed persons, pensioners or students. Therefore only employees have a legal title on benefits from the social security system (“non-charged” medical service, employee leave benefits, pension). All other persons might insure themselves optionally on a private contract base. Persons with a permanent residence permit (usually after 5 years) are obliged for health insurance (13.5% for self-employed persons; 1,337 Kč/month for those w/o any taxable income) and in case of income also for pension insurance (14.6% for self-employed persons, at least 1,972 Kč/month).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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