Inheritance tax in the Czech Republic

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In the Czech Republic , inheritance tax was levied on acquisitions due to death and gift tax was only levied on free gifts among the living if the acquirers were distant relatives of the testator or donor, non-relatives and legal entities. In 2014 inheritance tax was abolished in the Czech Republic. Taxable gifts are now subject to income tax.

Legal basis

The basis for inheritance and gift tax was the law on inheritance, gift and real estate transfer tax. The law was amended in 1999 to the effect that the immediate family (tax class I, see below) was exempt from inheritance tax, and in 2007 to the effect that, with effect from January 1, 2008, the other family (tax class II, cf. . below) have been exempt from inheritance tax and all family members named from gift tax; this also applied to certain persons living with the testator or donor.

Material and personal tax liability

All acquisitions of real estate located in the Czech Republic, but not foreign real estate, were subject to the tax. If the deceased was a Czech citizen and resided in the Czech Republic, all of his domestic and foreign movable property was subject to tax. Otherwise, i.e. in the case of Czechs living abroad or foreigners living in the Czech Republic, only domestic movable assets were taken into account in the tax. Decisive for the valuation was the market value, from which the debts, inheritance costs and funeral costs, insofar as they are within reasonable limits, could be deducted.

Tax brackets, exemptions and allowances

The law distinguished three tax classes.

  • Tax class I: Spouses and relatives in a straight line (such as children and grandchildren or parents and forefathers)
  • Tax class II: relatives on the sidelines such as siblings, nephews, nieces, aunts and uncles; Children in law and parents in law, step children and step parents; Persons living with the deceased for at least one year at the time of the transition and being cared for there or those who were dependent on the deceased's maintenance
  • Tax class III: all other natural and legal persons .

Acquirers in tax classes I and II were exempt from tax. State and municipal corporations, universities and research institutions, as well as non-profit organizations in the health care sector and church institutions were also exempt from the tax.

Tax rates

Inheritance tax was levied at a tax rate from the net value of the acquisition, with ten increasing value groups being formed up to a maximum amount of 50,000,000 Czech crowns (approx. 1,923,000 euros), for which the tax is calculated using the currently applicable tax rate . For those acquirers in tax class III who are still only taxable, the rates shown in the table below were used.

Inheritance tax Czech Republic
(tax class III)
Value group tax rate
up to 01,000,000 CZK 3.5%
1.000.000- 02,000,000 CZK 4.5%
2.000.000- 05,000,000 CZK 6 , 0 %
5.000.000- 07,000,000 CZK 7.5%
7,000,000-10,000,000 CZK 9 , 0 %
10,000,000-20,000,000 CZK 10.5%
20,000,000–30,000,000 CZK 12.5%
30,000,000-40,000,000 CZK 15 , 0 %
40,000,000–50,000,000 CZK 17.5%
over 50,000,000 CZK 20 , 0 %

Taxation procedure

The purchaser was liable for the tax. Insofar as there was tax liability, the purchaser had to submit a tax return describing the acquired items within 30 days of the legally binding conclusion of the inheritance proceedings. The assessment was carried out by the tax administration.

Gift tax

The gift tax was levied on the same basis as the inheritance tax, although the tax rates listed above for the inheritance tax were doubled. Since January 1, 2008, tax classes I (which, despite the exemption from inheritance tax in force since 1999, were still subject to gift tax up to that point in time) and II were also exempt from gift tax. The acquisition was subject to gift tax if either the donor or the acquirer is a domestic legal person, a Czech citizen or a foreigner resident or permanent residence in the Czech Republic. Insofar as gifts from movable assets were made to a recipient residing abroad, these were subject to tax if the gift was imported into the Czech Republic.

Double taxation

Double taxation was only conceivable in relation to parts of the movable property located abroad in the case of Czech testators residing in the Czech Republic. In this case, the inheritance tax paid on foreign assets abroad could be offset against the applicable Czech tax (Section 4 (1) Inheritance, Gift and Real Estate Transfer Tax Act). An agreement to avoid double taxation in the area of ​​inheritance and gift tax exists only with the Slovak Republic (which provides for mutual tax credit).

See also

Individual evidence

  1. JUDr. Jiří Matzner, Ph.D., LL.M .: Zrušené daně dědická a darovací - opravdu se nemusí nic platit? ( pravniprostor.cz [accessed March 5, 2018]).
  2. Law No. 357/1992, cf. Claudia Rombach: Inheritance law in the Czech Republic , in: Rembert Süß (Ed.): Inheritance law in Europe , Zerb-Verlag 2nd edition 2008, ISBN 978-3-935079-57-0 , pages 1518, fn. 69
  3. On the basis of: Claudia Rommbach: Inheritance Law in Czech Republic , in: Rembert Süß (Hrsg.): Inheritance Law in Europe , 2nd edition 2008, Zerb Verlag, ISBN 978-3-935079-57-0 , page 1529, Tz 124
  4. a b Troll / Gebel / Jülicher: Inheritance Tax and Gift Tax Act , 7th edition 2009, Vahlen, loose-leaf commentary, ISBN 978-3-8006-2402-7 , § 21 ErbStG, marginal no. 133 (Czech Republic)
  5. Law No. 357/1992, cf. Claudia Rombach: Inheritance Law in the Czech Republic , in: Rembert Süß (Hrsg.): Inheritance Law in Europe , Zerb-Verlag 2nd edition 2008, ISBN 978-3-935079-57-0 , pages 1521, item 127

literature

Claudia Rombach: Inheritance law in the Czech Republic , in: Rembert Süß (Ed.): Inheritance law in Europe , Zerb-Verlag 2nd edition 2008, ISBN 978-3-935079-57-0 , pages 1483–1523