The Czech tax system offers several valuable deductions that many expats don't know about — or don't claim because the process feels overwhelming in a foreign system. This guide covers every major deduction available to you, how to claim them, and the deadlines you need to know.
How Czech Income Tax Works for Expats
Czech Republic has a progressive income tax system with two rates: 15% on income up to approximately 1.9 million CZK per year, and 23% on income above that threshold. If you're a tax resident (living in Czechia for 183+ days per year), you're taxed on your worldwide income. Non-residents are taxed only on Czech-source income.
Most employed expats have tax handled through payroll — your employer withholds income tax, social security (6.5%), and health insurance (4.5%) from your gross salary. However, to claim the full range of deductions, you may need to either submit a prohlášení poplatníka (taxpayer declaration) to your employer or file a full tax return.
The Major Tax Deductions
1. Pension Contributions (DPS + DIP) — Up to 48,000 CZK
This is the most impactful deduction for most expats. Contributions to supplementary pension savings (DPS) and long-term investment products (DIP) are deductible up to a combined 48,000 CZK per year. At the 15% rate, that saves you 7,200 CZK. At 23%, it's 11,040 CZK. This deduction alone justifies setting up a pension for most working expats. See our DIP vs DPS comparison for details.
2. Life Insurance Premiums — Up to 48,000 CZK
Contributions to qualifying life insurance policies are deductible up to 48,000 CZK per year. The policy must meet specific conditions: it must cover the period until at least age 60 and have a minimum contract term of 60 months. Not all life insurance products qualify — we can check whether yours does.
3. Mortgage Interest — Up to 150,000 CZK
If you have a mortgage on property in Czech Republic (for your own housing), you can deduct the interest paid — up to 150,000 CZK per year. For mortgages taken out after January 2021, the limit was reduced from 300,000 CZK. This is one of the largest deductions available and applies to both Czech citizens and foreign residents.
Tip: The mortgage interest deduction is per household, not per person. If two people co-sign a mortgage, they share the 150,000 CZK limit. Keep your annual mortgage interest statement (potvrzení o zaplacených úrocích) from your bank — you'll need it for your tax return.
4. Basic Taxpayer Credit — 30,840 CZK
Every Czech tax resident is entitled to a basic taxpayer credit (sleva na poplatníka) of 30,840 CZK per year (2,570 CZK per month). This isn't a deduction from your tax base — it's a credit directly subtracted from your calculated tax. Most employers apply this automatically if you've submitted your taxpayer declaration.
5. Spouse Credit — 24,840 CZK
If your spouse (registered at the same address) earns less than 68,000 CZK per year, you can claim a credit of 24,840 CZK. This is particularly relevant for expat families where one partner is not yet working or is on parental leave.
6. Child Tax Credit
For each dependent child, you can claim: 15,204 CZK for the first child, 22,320 CZK for the second, and 27,840 CZK for the third and subsequent children. If the child has a disability card (ZTP/P), the credit doubles. This credit can even result in a tax bonus — meaning you receive money back if the credit exceeds your tax liability.
7. Charitable Donations — Up to 30% of Tax Base
Donations to registered Czech charities, educational institutions, and qualifying organizations are deductible if the total exceeds 1,000 CZK (or 2% of your tax base, whichever is lower). The maximum deduction is 30% of your tax base. Keep donation receipts with the organization's name, IČO, and amount.
8. Kindergarten / Preschool Credit — Up to 17,300 CZK
If you pay for a child in preschool or kindergarten (školka), you can claim a credit of up to 17,300 CZK per child per year (the amount equals the monthly minimum wage). This applies to registered Czech facilities and is claimed on your annual tax return.
How to Claim Your Deductions
Through your employer: Submit your prohlášení poplatníka (taxpayer declaration) at the beginning of the tax year. Your employer can apply the basic credit, spouse credit, child credit, and kindergarten credit directly through payroll. For pension and life insurance deductions, provide your employer with confirmation documents by February 15 and they'll include them in your annual reconciliation.
Through a tax return: If you have multiple income sources, are self-employed, or want to claim deductions your employer can't process, file a full tax return (daňové přiznání). The standard deadline is April 1, extended to May 1 for electronic filing, or July 1 if filed by a tax advisor.
Don't miss this: Many expats don't submit the prohlášení poplatníka to their employer, which means they miss the basic 30,840 CZK taxpayer credit all year. If this has happened to you, you can reclaim it by filing a tax return for that year.
Tax Deduction Summary Table
Pension (DPS + DIP): up to 48,000 CZK deduction from tax base (saves 7,200–11,040 CZK)
Life insurance: up to 48,000 CZK deduction from tax base
Mortgage interest: up to 150,000 CZK deduction from tax base
Basic taxpayer credit: 30,840 CZK directly off your tax bill
Spouse credit: 24,840 CZK (if spouse earns under 68,000 CZK/year)
Child credit: 15,204–27,840 CZK per child
Kindergarten credit: up to 17,300 CZK per child
Donations: up to 30% of tax base
For a family with two children, a mortgage, and properly structured pension contributions, the total tax savings can easily exceed 50,000 CZK per year. Use our salary calculator to see your net pay, and pension calculator to model the pension deduction impact.
Frequently Asked Questions
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Let's TalkAbout the author: Nicolas Griss is the co-founder of Profi Expats, a CNB-registered financial advisory firm helping expats in Czech Republic since 2017.