The Czech government has passed an amendment to the Income Taxes Act to Parliament that should be valid from 2013. According to the amendment, most dividend income will be exempt from withholding, corporate and personal income tax in the Czech Republic. The exemption applies to liquidation surpluses and dividends paid from and to limited liability companies, joint-stock companies and from limited partnerships to limited partners. It applies to income from companies in the Czech Republic, the EU, Norway, Iceland or Switzerland. However, the exemption does not apply when dividends are paid by a Czech investment or mutual fund or a foreign fund for collective investment. It should be noted that Czech funds can still benefi t from double tax treaties.
The exemption will be applicable only to dividend payments from profi ts created after the amendment comes into force, i.e. after January 1, 2013.