Daně a legislativa ČR
Czech Tax Resident and Worldwide Investment Income
Key takeaways
- A Czech tax resident pays tax on worldwide income — including dividends and gains from foreign ETFs.
- Withholding tax paid abroad is generally credited against the total Czech tax liability.
- The holding-period test does not apply to dividends — they are always taxed at 15%.
- Foreign brokers do not withhold Czech tax — you must file the return yourself.
A Czech tax resident is legally obliged to pay tax on all investment income regardless of where the assets are held or where the return was paid out — the principle of worldwide taxation applies.
What exactly counts as worldwide income
As a Czech resident you must declare and pay tax on:
- Dividends from Czech and foreign shares and ETFs
- Gains from the sale of securities purchased through foreign brokers
- Interest income from foreign bonds or money market funds
- Returns from P2P platforms registered abroad
How the prevention of double taxation works
The Czech Republic has double taxation treaties (DTTs) with dozens of countries. If a foreign platform or broker has withheld tax abroad, you can generally credit or exempt it against your Czech tax liability. The specific method depends on the relevant treaty. For example, Irish ETFs (UCITS) typically withhold no tax at source — the entire tax liability remains with you as a Czech resident.
Practical obligations
Foreign brokers such as Interactive Brokers, Trading 212 or Degiro do not collect Czech tax on your behalf. You therefore:
- Download annual statements from all brokers and platforms
- Convert returns to CZK using the CNB rate
- Prepare a summary of dividends, sales and other income
- Include everything in your tax return and pay tax in the Czech Republic
The situation when changing residency is covered in the article taxes when moving abroad with a portfolio. The Irish domicile of ETFs and its tax advantages are discussed in why UCITS ETFs with Irish domicile.
This article does not constitute tax advice. Tax rules may change and each situation is individual — consult a tax adviser. See also taxes on ETFs in the Czech Republic.
FAQ
Do I have to pay Czech tax on dividends from American shares?
Yes. As a Czech tax resident you pay tax on worldwide income, including dividends from American shares. The US generally withholds a withholding tax (typically 15% under the DTT), which can be credited against the Czech tax liability.
Do I pay tax twice — abroad and in the Czech Republic?
Mostly not. Double taxation treaties ensure that foreign withholding tax is credited or exempt. The resulting tax burden should not exceed the Czech tax rate — you just pay it through a different mechanism.
How do I declare dividends from a foreign ETF?
Download the annual statement from your broker, find out the amount of dividends paid and their country of origin, convert to CZK and include them as capital income in your tax return. The tax rate is 15%.