Interest income

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Interest income received from Czech banks/financial institutions

Interest received from current accounts or deposits from Czech bank or financial institutions is normally taxed at source of 15% flat tax rate by the bank or financial institution at the time of payment and is not subject to further tax. Czech tax non-residents can apply at the Czech bank or financial institution for non-withholding of this tax upon proving their foreign tax residency status.

Interest income received from abroad

Foreign interest income received by Czech tax residents is subject to a flat 15% tax rate in the Czech Republic. Such foreign interest is usually taxable only in the Czech Republic, i.e. foreign tax (if any) withheld from interest income abroad cannot be credited against the Czech tax. However, this should be determined on a case by case basis in accordance with the relevant Double tax treaty.

Foreign interest income received by Czech tax non-residents is not taxable in the Czech Republic.