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Czech Tax Advisor Qualifying Exam study materials
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Czech Tax Advisor Qualifying Exam practice questions

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Question 1Integrated role knowledge and Czech legal background

Under Section 2 of the Czech Income Taxes Act (Zákon č. 586/1992 Sb., o daních z příjmů - ZDP), what criteria determine that an individual is a Czech tax resident (daňový rezident ČR) subject to worldwide taxation?

  1. The individual has their permanent home (bydliště) in the Czech Republic or usually resides there for at least 183 days in the relevant calendar year Correct answer.
  2. The individual holds Czech citizenship regardless of where they reside or maintain their center of vital interests
  3. The individual owns residential real estate in Prague or Brno with a registered land registry value exceeding 5,000,000 CZK
  4. The individual is registered with the Czech Trade Licensing Office (Živnostenský úřad) for at least 90 consecutive days

Explanation

Under Section 2(2) of Act No. 586/1992 Coll., tax residents are individuals who have their domicile (bydliště - permanent home under circumstances indicating intention to stay permanently) in the Czech Republic or who stay in the Czech Republic for at least 183 days in a calendar year.

Question 2Integrated role knowledge and Czech legal background

Under Section 6 of the Czech Income Taxes Act (ZDP), what is the general tax base for income from dependent activity (employment income) following the abolition of the 'super-gross salary' (superhrubá mzda)?

  1. Gross employment income (hrubá mzda) including taxable fringe benefits, without adding employer-paid statutory social and health insurance contributions Correct answer.
  2. Gross employment income increased by 33.8% representing employer social security and health insurance contributions
  3. Net take-home pay after deducting employee mandatory statutory insurance contributions
  4. Gross salary reduced by an automatic 40% lump-sum expense allowance

Explanation

Following the tax reform effective 2021, the super-gross salary concept was abolished. The partial tax base under Section 6 ZDP is simply the gross taxable employment remuneration and benefits provided by the employer, without adding mandatory employer social and health insurance.

Question 3Integrated role knowledge and Czech legal background

Under Section 7(7) of the Czech Income Taxes Act (ZDP), what maximum percentage and monetary cap apply to lump-sum expense deductions (výdajové paušály) for an individual operating a craft trade (řemeslná živnost)?

  1. 80% of revenues, up to a maximum expense deduction of 1,600,000 CZK (calculated from a 2,000,000 CZK revenue ceiling) Correct answer.
  2. 60% of revenues, up to a maximum expense deduction of 1,200,000 CZK
  3. 40% of revenues, up to a maximum expense deduction of 800,000 CZK
  4. 30% of revenues, up to a maximum expense deduction of 600,000 CZK

Explanation

Under Section 7(7)(a) ZDP, income from craft trades (řemeslné živnosti) and agricultural production allows an 80% lump-sum expense deduction, with a maximum cap of 1,600,000 CZK (corresponding to 80% of the 2,000,000 CZK statutory revenue cap).

Question 4Integrated role knowledge and Czech legal background

A freelance software developer operating under an unregulated trade license (živnost volná) earns 1,800,000 CZK in 2026 and elects to claim lump-sum expenses under Section 7(7) ZDP (60% rate, max cap 1,200,000 CZK). What is the resulting partial tax base from independent activity?

  1. 720,000 CZK Correct answer.
  2. 1,080,000 CZK
  3. 600,000 CZK
  4. 1,200,000 CZK

Explanation

Lump-sum expenses = 60% of 1,800,000 CZK = 1,080,000 CZK (which is below the statutory cap of 1,200,000 CZK). Partial tax base = Revenue (1,800,000 CZK) - Expenses (1,080,000 CZK) = 720,000 CZK.

Question 5Integrated role knowledge and Czech legal background

Under Section 16 of the Czech Income Taxes Act (ZDP), what are the statutory progressive personal income tax rates and their threshold applicable in the Czech Republic?

  1. 15% on the tax base up to 36 times the national average wage, and 23% on the portion exceeding this threshold Correct answer.
  2. 15% flat rate on all income with zero progressive taxation
  3. 10% on employment income, 19% on business income, and 25% on capital investment gains
  4. 21% standard rate matching the corporate income tax rate on all personal income

Explanation

Under Section 16 ZDP (as amended by the Consolidation Package), personal income tax has two progressive rates: 15% on the tax base up to 36 times the average wage, and 23% on the portion of the tax base exceeding that statutory threshold.

Question 6Integrated role knowledge and Czech legal background

Under Section 35ba of the Czech Income Taxes Act (ZDP), what is the annual basic tax credit for the taxpayer (základní sleva na poplatníka)?

  1. 30,840 CZK per year, available to all individual taxpayers regardless of their level of income Correct answer.
  2. 24,840 CZK per year, phasing out once income exceeds 1,000,000 CZK
  3. 15,000 CZK per year, available only to taxpayers with dependent children under age 6
  4. 50,000 CZK per year, reduced by any employer contributions to private pension schemes

Explanation

Section 35ba(1)(a) ZDP sets the basic personal tax credit (sleva na poplatníka) at 30,840 CZK per year (2,570 CZK per month). It is available in full to every individual taxpayer without an income means-test ceiling.

Question 7Integrated role knowledge and Czech legal background

Under Section 35c of the Czech Income Taxes Act (ZDP), what is the tax child credit (daňové zvýhodnění na vyživované dítě) and when does it become a tax bonus (daňový bonus)?

  1. The credit reduces calculated income tax; if the credit exceeds the tax liability, the negative difference is paid out to the taxpayer as a cash tax bonus, subject to earning at least 6 times the minimum wage Correct answer.
  2. The credit is paid only as a discount voucher redeemable for school textbooks at municipal libraries
  3. The credit can reduce tax to zero, but any excess is forfeited and can never be refunded as cash
  4. The bonus is paid directly by the Ministry of Education to the child's school bank account

Explanation

Under Section 35c ZDP, the child credit first offsets tax liability. If the credit exceeds tax, the excess is paid to the taxpayer as a tax bonus (daňový bonus), provided the taxpayer earned active income (under § 6 or § 7) of at least 6 times the minimum monthly wage.

Question 8Integrated role knowledge and Czech legal background

Under Section 7a of the Czech Income Taxes Act (ZDP), what is the flat-rate tax regime for self-employed individuals (paušální daň pro OSVČ)?

  1. A simplified regime where qualifying non-VAT registered entrepreneurs pay a single fixed monthly payment that covers income tax, social security, and health insurance combined Correct answer.
  2. A flat 25% tax assessed exclusively on cash withdrawals from commercial ATMs
  3. A municipal fee payable to the city hall for the right to display commercial advertising signage
  4. A tax regime applicable exclusively to commercial partnerships (veřejná obchodní společnost)

Explanation

Section 7a ZDP allows qualifying self-employed persons (OSVČ) whose annual turnover does not exceed 2,000,000 CZK (divided into three income bands) to pay one unified monthly payment covering personal income tax, pension insurance, and public health insurance.

Question 9Integrated role knowledge and Czech legal background

Under Section 4 of the Czech Income Taxes Act (ZDP), what is the time test (časový test) required for exempting capital gains from the sale of shares in a commercial corporation (other than investment funds)?

  1. Holding the shares for at least 3 years between acquisition and sale Correct answer.
  2. Holding the shares for exactly 6 months
  3. Holding the shares for at least 5 years if the company owns real estate
  4. There is no time test; all capital gains from corporate shares are taxed at 23%

Explanation

Section 4(1)(x) (formerly Section 4(1)(w)) of Act No. 586/1992 Coll. establishes a 3-year holding period (časový test) for exempting income from the sale of securities (shares, bonds).

Question 10Integrated role knowledge and Czech legal background

Under Section 4(1)(s) of the Czech Income Taxes Act (ZDP), what holding period is required for an individual to exempt income from the sale of an ownership interest in a limited liability company (převod podílu v s.r.o. - not represented by securities)?

  1. At least 5 years between acquisition and transfer Correct answer.
  2. At least 3 years, identical to listed securities
  3. At least 10 years, unless the buyer is an immediate family member
  4. Exactly 12 calendar months

Explanation

Under Section 4(1)(s) of Act No. 586/1992 Coll., income from the transfer of an ownership share in a business corporation (such as an s.r.o. podíl) is exempt if the holding period between acquisition and transfer exceeds 5 years.

Question 11Integrated role knowledge and Czech legal background

Under Section 21 of the Czech Income Taxes Act (ZDP), what is the statutory corporate income tax rate (sazba daně z příjmů právnických osob) effective from the 2024 Consolidation Package onwards?

  1. 21% Correct answer.
  2. 19%
  3. 15%
  4. 24%

Explanation

Effective from tax periods starting on or after 1 January 2024 (under Act No. 349/2023 Coll., the Consolidation Package), Section 21(1) ZDP increased the standard corporate income tax rate from 19% to 21%.

Question 12Integrated role knowledge and Czech legal background

A Czech joint-stock company reports an accounting profit before tax of 20,000,000 CZK in 2026. The accounting result includes: 500,000 CZK non-deductible representation expenses (repre), 300,000 CZK non-deductible administrative fines, 1,200,000 CZK accounting depreciation, and 1,800,000 CZK tax depreciation. Assuming no other adjustments, what is the corporate income tax base and tax liability at 21%?

  1. Tax base is 20,200,000 CZK and tax liability is 4,242,000 CZK Correct answer.
  2. Tax base is 21,400,000 CZK and tax liability is 4,494,000 CZK
  3. Tax base is 19,000,000 CZK and tax liability is 3,990,000 CZK
  4. Tax base is 20,000,000 CZK and tax liability is 4,200,000 CZK

Explanation

Tax base adjustments: Accounting profit (20,000,000) + Non-deductible repre (500,000) + Non-deductible fines (300,000) + Accounting depreciation (1,200,000) - Tax depreciation (1,800,000) = 20,000,000 + 800,000 - 600,000 = 20,200,000 CZK. Tax liability at 21% = 20,200,000 * 0.21 = 4,242,000 CZK.

Question 13Integrated role knowledge and Czech legal background

Under Section 26 of the Czech Income Taxes Act (ZDP), what is the monetary threshold for a standalone movable asset (samostatná hmotná movitá věc) to be classified as a depreciable tangible asset?

  1. An acquisition cost exceeding 80,000 CZK and an operational useful life longer than one year Correct answer.
  2. An acquisition cost exceeding 40,000 CZK and a useful life longer than three years
  3. An acquisition cost exceeding 100,000 CZK regardless of operational lifespan
  4. Any asset purchased using bank credit financing exceeding 50,000 CZK

Explanation

Under Section 26(2)(a) ZDP, tangible assets include standalone movable assets whose input price (vstupní cena) exceeds 80,000 CZK and whose operational and technical functions exceed one year (increased from 40,000 CZK in recent reforms).

Question 14Integrated role knowledge and Czech legal background

Under Section 30 and Section 32 of the Czech Income Taxes Act (ZDP), into which asset depreciation group is a passenger car (osobní automobil) classified, and what is its minimum tax depreciation period?

  1. Asset Class 2 (odpisová skupina 2), with a minimum tax depreciation period of 5 years Correct answer.
  2. Asset Class 1, with a minimum tax depreciation period of 3 years
  3. Asset Class 3, with a minimum tax depreciation period of 10 years
  4. Asset Class 4, with a minimum tax depreciation period of 20 years

Explanation

Under Annex No. 1 to Act No. 586/1992 Coll. and Section 30 ZDP, motor vehicles (including passenger cars, trucks, and vans) are classified in Asset Class 2, which has a statutory depreciation period of 5 years.

Question 15Integrated role knowledge and Czech legal background

A company purchases industrial manufacturing machinery classified in Asset Class 3 (10-year depreciation period) with an input price of 1,000,000 CZK. Under Section 31 ZDP, the straight-line depreciation rates for Class 3 are: 5.5% in the first year and 10.5% in subsequent years. What is the tax depreciation in year 1 and year 2?

  1. Year 1: 55,000 CZK; Year 2: 105,000 CZK Correct answer.
  2. Year 1: 100,000 CZK; Year 2: 100,000 CZK
  3. Year 1: 105,000 CZK; Year 2: 105,000 CZK
  4. Year 1: 50,000 CZK; Year 2: 95,000 CZK

Explanation

Year 1 straight-line tax depreciation = 1,000,000 CZK * 5.5% = 55,000 CZK. Year 2 straight-line tax depreciation = 1,000,000 CZK * 10.5% = 105,000 CZK.

Question 16Integrated role knowledge and Czech legal background

Under Section 32 of the Czech Income Taxes Act (ZDP), what is the statutory formula for accelerated tax depreciation (zrychlené odpisování) in subsequent years (years 2 and beyond)?

  1. 2 * Net Book Value / (Statutory coefficient for subsequent years - Number of years already depreciated) Correct answer.
  2. Input Price / Statutory coefficient for the first year
  3. Net Book Value * Straight-line percentage rate * 1.5
  4. Input Price less accumulated depreciation divided by remaining months of useful life

Explanation

Section 32(2)(b) ZDP defines the accelerated depreciation formula for subsequent years as: (2 * ZC) / (k - n), where ZC is net book value (zůstatková cena), k is the statutory coefficient for subsequent years, and n is the number of years already depreciated.

Question 17Integrated role knowledge and Czech legal background

Under Section 25(1)(t) of the Czech Income Taxes Act (ZDP), what conditions must be satisfied for a promotional gift item (reklamní nebo propagační předmět) to be recognized as a tax-deductible expense?

  1. The item must be marked with the provider's commercial name, trademark, or name of promotional supply, its unit value without VAT must not exceed 500 CZK, and it must not be subject to excise tax (except still wine up to 500 CZK) Correct answer.
  2. The item can be of any monetary value provided it is distributed exclusively to registered charities
  3. The item must be cash or a prepaid bank debit card given directly to customer purchasing executives
  4. The item must be an alcoholic spirit or tobacco product manufactured inside the Czech Republic

Explanation

Under Section 25(1)(t) ZDP, promotional items are tax-deductible if they carry the commercial name/trademark/product name, unit cost without VAT does not exceed 500 CZK, and they are not subject to excise duty (except non-sparkling still wine carrying the provider's branding).

Question 18Integrated role knowledge and Czech legal background

Under Section 24(2)(f) of the Czech Income Taxes Act (ZDP), what timing rule governs the tax deductibility of employer-paid statutory social security and health insurance contributions?

  1. They are tax-deductible in the tax period to which they relate economically only if they are paid by the end of the month following the end of that tax period (or period for filing tax return) Correct answer.
  2. They are deductible only if paid on the exact day when employee wages are transferred to bank accounts
  3. They are deductible unconditionally in the period accrued, regardless of whether or when the employer ever pays them
  4. They are permanently non-deductible for corporate income tax under all circumstances

Explanation

Under Section 24(2)(f) ZDP, mandatory social and health insurance payable by the employer is tax-deductible in the period to which it relates provided it is paid no later than the end of the month following the end of the tax period.

Question 19Integrated role knowledge and Czech legal background

Under Section 34 of the Czech Income Taxes Act (ZDP), what is the maximum period over which a tax loss (daňová ztráta) assessed by the tax administrator can be carried forward as a deduction from the tax base?

  1. In the 5 tax periods immediately following the period for which the loss was assessed Correct answer.
  2. Indefinitely without any time limitation
  3. Only in the 2 tax periods immediately following the loss year
  4. Exclusively in the single subsequent tax period, after which any remaining loss is forfeited

Explanation

Section 34(1) of Act No. 586/1992 Coll. provides that a tax loss assessed for a tax period can be claimed as a deduction from the tax base in the five immediately following tax periods (loss carryforward).

Question 20Integrated role knowledge and Czech legal background

Under Section 34(1) of the Czech Income Taxes Act (ZDP), what rules govern the tax loss carryback (zpětné uplatnění daňové ztráty)?

  1. A tax loss can be carried back to the 2 tax periods immediately preceding the loss year, up to an aggregate maximum total deduction of 30,000,000 CZK across both preceding periods Correct answer.
  2. A tax loss can be carried back 5 years with no monetary cap
  3. Tax loss carryback is permitted only for agricultural cooperatives with fewer than 20 members
  4. Loss carryback requires a mandatory cash guarantee deposited with the Czech National Bank

Explanation

Under Section 34(1) ZDP (introduced as permanent legislation), a taxpayer may carry back an assessed tax loss against the tax bases of the 2 immediately preceding tax periods, subject to a combined statutory cap of 30,000,000 CZK.

Question 21Integrated role knowledge and Czech legal background

Under Section 36 of the Czech Income Taxes Act (ZDP), what standard withholding tax rate (zvláštní sazba daně vybírané srážkou) applies to dividends paid by a Czech resident corporation to an individual resident in the Czech Republic?

  1. 15% Correct answer.
  2. 21%
  3. 19%
  4. 35%

Explanation

Section 36(2) of Act No. 586/1992 Coll. establishes a 15% special withholding tax rate on dividends and profit shares paid to Czech tax resident natural persons.

Question 22Integrated role knowledge and Czech legal background

Under Section 19 of the Czech Income Taxes Act (implementing the EU Parent-Subsidiary Directive), what conditions exempt dividends paid by a Czech subsidiary to its EU parent company from withholding tax?

  1. The parent company holds at least a 10% interest in the registered capital of the subsidiary for an uninterrupted period of at least 12 consecutive months, and both entities are qualifying legal forms subject to corporate tax Correct answer.
  2. The parent company must hold 100% of the voting shares for at least 5 years
  3. The subsidiary must employ at least 250 workers and be located in an economically distressed region
  4. Exemption applies only if the dividend is paid entirely in newly issued corporate shares rather than cash

Explanation

Under Section 19(1)(ze) and Section 19(3) ZDP, dividends distributed by a subsidiary to its parent company are exempt from corporate income tax/withholding tax if the parent holds at least 10% of the subsidiary's capital for an uninterrupted period of at least 12 months.

Question 23Integrated role knowledge and Czech legal background

Under Section 36(1)(c) of the Czech Income Taxes Act (ZDP), in which circumstance does the punitive 35% withholding tax rate apply to payments of income sourced in the Czech Republic?

  1. When the income is paid to a tax resident of a state with which the Czech Republic has no double taxation treaty or tax information exchange agreement (TIEA), or a state not in the EU/EEA Correct answer.
  2. When any corporate client fails to file its annual tax return electronically by the 1st of April
  3. When payments of interest between domestic Czech commercial banks exceed 50 million CZK
  4. When dividend payments are made to individual Czech citizens residing in Prague

Explanation

Section 36(1)(c) ZDP imposes a penal 35% withholding tax on outbound payments (dividends, interest, royalties) made to recipients in non-EU/EEA jurisdictions that have not concluded a double tax treaty or comprehensive tax information exchange agreement with Czechia.

Question 24Integrated role knowledge and Czech legal background

Under Section 38f of the Czech Income Taxes Act (ZDP), what is the difference between the ordinary tax credit method (prostý zápočet) and the exemption with progression method (vynětí s výhradou progrese) for eliminating double taxation?

  1. Under ordinary credit, foreign tax paid is credited against domestic tax up to the amount of domestic tax attributable to foreign income; under exemption with progression, foreign income is excluded from the tax base but used to determine the progressive tax rate on remaining income Correct answer.
  2. Under ordinary credit, the taxpayer receives an unconditional cash refund from the Czech state budget for all foreign taxes paid
  3. Under exemption with progression, all foreign income is taxed at a flat rate of 50% regardless of treaty provisions
  4. There is no difference; both terms are interchangeable synonyms under Czech bilateral tax treaties

Explanation

Under Section 38f ZDP, ordinary tax credit (prostý zápočet) allows deducting foreign tax paid up to the proportional Czech tax attributable to that foreign income. Exemption with progression (vynětí s výhradou progrese) excludes the foreign income from the tax base while applying the progressive tax rate resulting from aggregate global income.

Question 25Integrated role knowledge and Czech legal background

A Czech tax resident individual earns 600,000 CZK in gross employment income from Germany, on which 90,000 CZK in German income tax was paid. In Czechia, the individual also earns 400,000 CZK in domestic rental income. Under the Czech-German Double Tax Treaty, the credit method applies. If the proportional Czech tax on German income before credits is 85,000 CZK, how much foreign tax credit can be claimed under Section 38f ZDP?

  1. 85,000 CZK (capped at the domestic Czech tax attributable to the foreign income) Correct answer.
  2. 90,000 CZK (the full amount of German tax paid)
  3. 5,000 CZK (the difference between foreign tax and domestic tax)
  4. Zero, because employment income cannot be relieved via the credit method

Explanation

Under the ordinary credit method (prostý zápočet under § 38f ZDP), the foreign tax credit is capped at the amount of Czech tax attributable to the foreign income. Since Czech tax on that income is 85,000 CZK, the maximum allowable credit is 85,000 CZK (the remaining 5,000 CZK of German tax cannot be credited).

Question 26Integrated role knowledge and Czech legal background

Under Section 33 of the Czech Income Taxes Act (ZDP), what constitutes 'technical improvement' (technické zhodnocení) of a tangible fixed asset, and what is its statutory expenditure threshold?

  1. Expenditure on completed reconstruction, modernization, extension, or building alterations exceeding 80,000 CZK in the aggregate for an individual asset in a single tax period Correct answer.
  2. Routine replacement of worn components and maintenance painting exceeding 20,000 CZK
  3. Any repair performed by an external contractor exceeding 10,000 CZK
  4. Upgrades to computer operating system software costing more than 5,000 CZK

Explanation

Under Section 33(1) ZDP, technical improvement comprises modernization, reconstruction, additions, and building alterations of tangible assets where total expenses exceed 80,000 CZK for an individual asset in a tax period (increased from 40,000 CZK). It increases the asset's tax base.

Question 27Integrated role knowledge and Czech legal background

For Czech employee income tax, how are employer-paid business travel reimbursements generally treated when they stay within the limits available to public-sector employees under the Labour Code?

  1. They are not included in the employee's taxable income if the statutory conditions and limits are met Correct answer.
  2. They are always taxable salary, even when properly documented
  3. They are exempt only when the business trip lasts at least 30 days
  4. They are exempt without limit whenever the employer labels a payment as travel reimbursement

Explanation

Section 6(7)(a) ZDP excludes qualifying travel reimbursements from the employee's taxable income up to the limits available to public-sector employees under the Labour Code. An excess can be taxable to the employee even where the employer's own expense treatment follows different rules.

Question 28Integrated role knowledge and Czech legal background

Under Section 30a ZDP in 2026, which asset may a first depreciator generally depreciate without interruption over 24 months using 60% in the first 12 months and 40% in the next 12 months?

  1. A zero-emission vehicle acquired from 1 January 2024 through 31 December 2028 Correct answer.
  2. Any new asset in depreciation class 1 acquired in 2026
  3. Any administrative building acquired before 31 December 2028
  4. A used combustion-engine passenger vehicle acquired from a related party

Explanation

For 2026, Section 30a permits the first depreciator of a qualifying zero-emission vehicle acquired during 2024–2028 to depreciate it over 24 uninterrupted months: 60% over the first 12 months and 40% over the next 12 months.

Question 29Integrated role knowledge and Czech legal background

Effective from 2024 under the Consolidation Package, what limitation was enacted under Section 30i and Section 24(2) ZDP regarding tax depreciation and leasing of passenger cars of category M1?

  1. A maximum tax-deductible acquisition price ceiling of 2,000,000 CZK; tax depreciation or lease expenses on the portion of the purchase price exceeding 2,000,000 CZK are non-deductible Correct answer.
  2. A complete ban on corporate purchase of any petrol or diesel motor vehicle
  3. A requirement that all passenger cars must be depreciated over a minimum of 20 years
  4. An exemption from all tax limits if the vehicle is manufactured in an EU member state

Explanation

From 1 January 2024, Act No. 349/2023 Coll. introduced a 2,000,000 CZK cap on the tax-relevant input price of M1 category passenger cars. Tax depreciation or financial lease payments attributable to the purchase price above 2,000,000 CZK are non-deductible.

Question 30Integrated role knowledge and Czech legal background

Under Section 38v of the Czech Income Taxes Act (ZDP), what reporting duty applies to Czech taxpayers regarding exempt income received by individuals (oznámení o osvobozených příjmech)?

  1. An individual who receives tax-exempt income exceeding 5,000,000 CZK in an individual instance must notify the tax administrator by the filing deadline for the tax return Correct answer.
  2. Every individual must report all cash gifts received from parents exceeding 10,000 CZK within 24 hours
  3. All foreign exchange gains from vacation travel must be registered with the Financial Administration
  4. Reporting applies only to lottery winnings exceeding 50,000,000 CZK

Explanation

Section 38v ZDP requires individuals who receive exempt income exceeding 5,000,000 CZK for an individual item of income (such as an inheritance, gift, or exempt share sale) to file a formal notification with the tax authority by the deadline for filing the annual tax return.

Question 31Integrated role knowledge and Czech legal background

Under the Czech VAT registration rules applicable in 2026, what generally happens when a Czech-established taxable person's domestic turnover in a calendar year first exceeds CZK 2,536,500?

  1. The person generally becomes a VAT payer on the day after exceeding that threshold Correct answer.
  2. The person becomes a payer only on 1 January of the second following calendar year
  3. The person remains outside VAT until rolling 12-month turnover exceeds CZK 5 million
  4. The person becomes a payer only if the tax authority first completes a field audit

Explanation

The current system measures turnover by calendar year and uses two thresholds. Exceeding CZK 2,536,500 generally creates payer status on the following day. Exceeding only CZK 2 million generally produces status from the next 1 January unless the person makes a timely election for earlier status.

Question 32Integrated role knowledge and Czech legal background

Under Section 6g to 6i of the Czech VAT Act (ZDPH), what is an 'Identified Person' (identifikovaná osoba) for VAT purposes?

  1. A taxable person who is not a full VAT payer in the Czech Republic but is obligated to register for VAT solely to pay tax on intra-Community acquisitions of goods or cross-border services received from abroad, without entitlement to input tax deduction Correct answer.
  2. An individual registered on the police criminal record database for tax fraud
  3. A non-profit association that is completely exempt from all Czech taxes indefinitely
  4. A multinational corporation registered in the Prague Stock Exchange PX Index

Explanation

An identified person (identifikovaná osoba under §§ 6g–6i ZDPH) is a non-VAT payer (e.g. small entrepreneur) who engages in cross-border transactions (such as acquiring goods from other EU states over 326,000 CZK or receiving cross-border services under § 9(1)). They must pay Czech VAT on cross-border inputs without entitlement to input deductions, while remaining non-VAT payers domestically.

Question 33Integrated role knowledge and Czech legal background

Following the 2024 Consolidation Package amendment to Section 47 of the Czech VAT Act (ZDPH), what are the standard and reduced VAT rates in the Czech Republic?

  1. A standard rate of 21% and a single consolidated reduced rate of 12% (with books zero-rated under Section 71i) Correct answer.
  2. A standard rate of 21%, a first reduced rate of 15%, and a second reduced rate of 10%
  3. A flat rate of 19% across all goods and services without exemptions
  4. A standard rate of 25% and a reduced rate of 5%

Explanation

Effective 1 January 2024 (Act No. 349/2023 Coll.), the Czech Republic consolidated its two former reduced rates (10% and 15%) into a single unified reduced rate of 12%, while maintaining the standard rate at 21%. Books and printed/electronic publications are zero-rated (0% with credit under Section 71i).

Question 34Integrated role knowledge and Czech legal background

Under Section 9(1) of the Czech VAT Act (ZDPH), what is the basic rule for determining the place of supply of services provided to a taxable person (B2B rule)?

  1. The place where the recipient of the service has the seat (sídlo) of its economic activity (or fixed establishment receiving the service) Correct answer.
  2. The place where the service provider has its registered statutory headquarters
  3. The physical location where the service is performed in all instances
  4. The jurisdiction where bank settlement currency is cleared

Explanation

Section 9(1) ZDPH (implementing Article 44 of EU VAT Directive 2006/112/EC) sets out the fundamental B2B general rule: the place of supply of services to a taxable person acting as such is the place where that person has established its business seat (or permanent establishment).

Question 35Integrated role knowledge and Czech legal background

Under Section 10 of the Czech VAT Act (ZDPH), what special place-of-supply rule applies to services directly connected to immovable property (služby vztahující se k nemovité věci)?

  1. The place where the immovable property is physically situated Correct answer.
  2. The place where the service provider is registered for VAT
  3. The place where the customer maintains its commercial bank account
  4. Always the capital city of the country where the architectural contract was drafted

Explanation

Section 10 ZDPH (implementing Article 47 of EU VAT Directive) provides that the place of supply of services directly related to real estate (architects, real estate agents, construction, property maintenance) is the location where the immovable property is physically located.

Question 36Integrated role knowledge and Czech legal background

Under Sections 51, 54, and 55 of the Czech VAT Act (ZDPH), how are qualifying financial and insurance services generally treated?

  1. Exempt from tax without entitlement to input tax deduction (osvobozená plnění bez nároku na odpočet daně) Correct answer.
  2. Taxable at the standard 21% VAT rate with full right of input deduction
  3. Taxable at the reduced 12% VAT rate
  4. Exempt from tax with full entitlement to input tax deduction (osvobozená plnění s nárokem na odpočet)

Explanation

Financial services (§ 54) and insurance services (§ 55) are statutory exemptions without entitlement to input tax deduction under Section 51 ZDPH. Providers cannot recover input VAT incurred on goods/services used for these supplies (unless provided to non-EU counterparties under § 54a).

Question 37Integrated role knowledge and Czech legal background

Under Section 64 of the Czech VAT Act (ZDPH), what conditions must be satisfied for the supply of goods to another EU member state (dodání zboží do jiného členského státu) to be exempt from VAT with entitlement to input tax deduction?

  1. The goods are dispatched or transported to another EU member state, the customer is registered for VAT in another member state and provides its valid foreign VAT ID, and the supply is declared in the Summary Report (Souhrnné hlášení) Correct answer.
  2. The goods are sold to any private consumer who displays an EU passport at the point of sale
  3. The goods are shipped outside the territory of the European Union across maritime waters
  4. The customer pays for the goods in cash in physical Euro banknotes

Explanation

Under Section 64 ZDPH, intra-Community supply of goods is exempt with credit if: (1) goods are dispatched/transported from Czechia to another EU state by supplier or customer, (2) customer is registered for VAT in another EU state and gave its VAT ID, and (3) transaction is reported in the VIES Summary Report.

Question 38Integrated role knowledge and Czech legal background

Under Section 76 of the Czech VAT Act (ZDPH), how is the pro-rata input tax deduction settlement coefficient (vypořádací koeficient) calculated for a VAT payer performing both taxable supplies and exempt supplies without deduction?

  1. Total revenues from supplies with input deduction entitlement divided by total revenues from all supplies (with and without deduction), rounded up to the nearest whole percentage point Correct answer.
  2. Total revenues from exempt supplies divided by total company equity at year-end
  3. Fixed at an automatic 50% allowance regardless of actual revenue composition
  4. Calculated as total input VAT invoices divided by total output VAT declared

Explanation

Section 76(2) ZDPH defines the settlement coefficient: the numerator is the sum of supplies with entitlement to deduction; the denominator is total supplies (numerator plus exempt supplies without deduction). Section 76(3) requires rounding up to the nearest whole percentage point (e.g. 74.1% rounds up to 75%).

Question 39Integrated role knowledge and Czech legal background

In 2026, a VAT payer has 8,000,000 CZK in taxable supplies (with deduction) and 2,000,000 CZK in exempt financial supplies without deduction. The payer incurs 210,000 CZK in input VAT on shared operational overhead expenses. Under Section 76 ZDPH, what is the settlement coefficient and the allowable input VAT deduction on overheads?

  1. Settlement coefficient is 80% (0.80) and allowable input deduction is 168,000 CZK Correct answer.
  2. Settlement coefficient is 100% and allowable input deduction is 210,000 CZK
  3. Settlement coefficient is 75% and allowable input deduction is 157,500 CZK
  4. Settlement coefficient is 20% and allowable input deduction is 42,000 CZK

Explanation

Coefficient = 8,000,000 / (8,000,000 + 2,000,000) = 8,000,000 / 10,000,000 = 80%. Allowable input deduction = 210,000 CZK * 80% = 168,000 CZK.

Question 40Integrated role knowledge and Czech legal background

Under Section 78 of the Czech VAT Act (ZDPH), what is the statutory adjustment period (lhůta pro úpravu odpočtu daně) for changes in the use of long-term assets?

  1. 5 years for movable tangible assets and intangible assets, and 10 years for immovable property (buildings, land, apartments) Correct answer.
  2. 3 years for all categories of fixed and current assets alike
  3. 20 years for all industrial manufacturing machinery
  4. Only the single calendar year in which the asset was acquired and commissioned

Explanation

Section 78(3) ZDPH provides that the adjustment period for input tax deductions is 5 years for long-term tangible movable assets and intangible assets, and 10 years for immovable property (real estate).

Question 41Integrated role knowledge and Czech legal background

Under Section 101a of the Czech VAT Act (ZDPH), what is the statutory deadline for submitting the regular VAT return (daňové přiznání k DPH)?

  1. Within 25 days after the end of the tax period (month or quarter), exclusively electronically Correct answer.
  2. By the 15th day of the month following the end of the quarter, submitted in paper format
  3. Within 3 months after the end of the calendar year, alongside the income tax return
  4. By the last day of the month following the quarter in which taxable turnover occurred

Explanation

Section 101a and Section 101 ZDPH require VAT payers to file the tax return and pay the tax within 25 days following the end of the tax period (monthly or quarterly), strictly in electronic format.

Question 42Integrated role knowledge and Czech legal background

Under Sections 101c and 101e ZDPH, when must a VAT-payer legal entity submit a Control Statement (Kontrolní hlášení)?

  1. When it has transactions specified in Section 101c; it reports for the calendar month within 25 days after month-end Correct answer.
  2. Only companies with annual turnover exceeding 100,000,000 CZK submitted once per year
  3. Individual consumers who purchase goods exceeding 10,000 CZK in cash
  4. Only VAT payers who have received a formal audit summons from the regional police

Explanation

A payer files when it has a Section 101c transaction, such as a qualifying domestic taxable supply, reverse-charge liability, or claimed input deduction. A legal entity's reporting period is the calendar month and its deadline is 25 days after month-end.

Question 43Integrated role knowledge and Czech legal background

Under Section 101g of the Czech VAT Act (ZDPH), what is the statutory deadline for a VAT payer to respond to a notice to eliminate doubts in the Control Statement (výzva k odstranění pochybností v kontrolním hlášení)?

  1. Within 5 working days from delivery of the notice Correct answer.
  2. Within 30 calendar days from the date stamped on the envelope
  3. Within 6 months, matching the corporate income tax advisor filing period
  4. No deadline applies; responses are purely voluntary recommendations

Explanation

Section 101g(2) ZDPH mandates that the taxpayer must respond to a notice to change, supplement, or confirm data in the Control Statement within 5 working days of delivery of the notice.

Question 44Integrated role knowledge and Czech legal background

Under Section 101h of the Czech VAT Act (ZDPH), what statutory fine is automatically imposed if a VAT payer submits the Control Statement late without being prompted by the tax authority?

  1. 1,000 CZK (which may be subject to statutory waiver under defined statutory conditions) Correct answer.
  2. 10,000 CZK
  3. 30,000 CZK
  4. 50,000 CZK

Explanation

Section 101h(1)(a) ZDPH imposes a fixed fine of 1,000 CZK if the taxpayer submits the Control Statement after the statutory deadline without being prompted by the tax administrator. (10,000 CZK applies if submitted upon notice; 30,000 CZK for failure to respond to a notice to supplement; 50,000 CZK for total failure to submit upon notice).

Question 45Integrated role knowledge and Czech legal background

Under Section 102 of the Czech VAT Act (ZDPH), who is obligated to submit the Summary Report (Souhrnné hlášení - VIES)?

  1. A VAT payer who supplies goods to another EU member state to a person registered for VAT, or provides cross-border services under Section 9(1) with place of supply in another EU member state Correct answer.
  2. Every merchant who exports physical machinery to third countries outside the European Union
  3. Companies that import consumer electronics from China or Japan
  4. Entities that perform domestic retail trade strictly inside the Czech Republic

Explanation

Section 102(1) ZDPH requires VAT payers to submit the Summary Report (Souhrnné hlášení) when they supply goods to another EU state (§ 64), transfer own business goods to another EU state, or provide cross-border B2B services under § 9(1) where the customer is liable for tax.

Question 46Integrated role knowledge and Czech legal background

Under Section 92a of the Czech VAT Act (ZDPH), what is the key procedural requirement on a tax document issued under the domestic reverse-charge regime (režim přenesení daňové povinnosti)?

  1. The tax document must state that the tax liability is transferred to the customer (daň odvede zákazník), and must not state the calculated tax amount Correct answer.
  2. The invoice must display the personal passport photo of the supplier's statutory director
  3. The document must be printed in triplicate on yellow watermarked paper
  4. The invoice must state 0% VAT and claim an export customs clearance number

Explanation

Under Section 92a(2) and Section 29 ZDPH, a tax document issued under domestic reverse charge must contain the statutory statement 'daň odvede zákazník' (tax to be paid by customer), and must state the tax base and rate, but must NOT state the tax amount.

Question 47Integrated role knowledge and Czech legal background

Under Section 106a of the Czech VAT Act (ZDPH), on what statutory grounds may the tax administrator designate a VAT payer as an 'unreliable taxpayer' (nespolehlivý plátce)?

  1. If the payer seriously breaches its statutory obligations regarding tax administration, such as running a cumulative tax debt exceeding a specified threshold or being involved in suspected VAT fraud carousel chains Correct answer.
  2. If the payer reports an accounting net loss for two consecutive quarters
  3. If the company changes its corporate bank account from one domestic Czech bank to another
  4. If the statutory executive does not hold Czech citizenship

Explanation

Section 106a ZDPH and General Financial Directorate guidelines specify that a payer is classified as unreliable (nespolehlivý plátce) if they seriously breach VAT obligations, including unpaid tax arrears exceeding statutory limits, failing to file returns/control statements repeatedly, or participating in fraudulent supply chains.

Question 48Integrated role knowledge and Czech legal background

Under the Czech Excise Tax Act (Zákon č. 353/2003 Sb., o spotřebních daních), what is the 'duty suspension regime' (režim podmíněného osvobození od daně)?

  1. A tax regime under which selected excise products may be produced, processed, stored, and transported between authorized tax warehouses without immediate payment of excise duty Correct answer.
  2. A temporary cancellation of all consumer taxes during state emergency declarations
  3. An exemption granted to supermarkets allowing them to sell duty-free cigarettes to minors
  4. A regime where excise tax is replaced entirely by local municipal road maintenance tolls

Explanation

Under Act No. 353/2003 Coll. and EU excise directives, the duty suspension arrangement (režim podmíněného osvobození od daně) permits selected goods (mineral oils, alcohol, beer, tobacco) to be held, manufactured, and moved between tax warehouses (daňové sklady) under electronic EMCS tracking without incurring excise duty until released for consumption.

Question 49Integrated role knowledge and Czech legal background

Under Act No. 353/2003 Coll., who is the administrative and supervisory body responsible for administering excise taxes (spotřební daně) in the Czech Republic?

  1. The Customs Administration of the Czech Republic (Celní správa ČR - Celní úřady) Correct answer.
  2. The territorial Financial Offices (Finanční úřady) of the Financial Administration
  3. The State Agricultural and Food Inspection Authority (SZPI)
  4. The Ministry of Industry and Trade

Explanation

Under Section 1 of Act No. 353/2003 Coll., excise taxes (on mineral oils, alcohol, beer, wine, and tobacco products) are administered exclusively by the Customs Administration of the Czech Republic (Celní správa ČR), not the general Financial Offices.

Question 50Integrated role knowledge and Czech legal background

Under the Czech Energy Taxes (Zákon č. 261/2007 Sb., o stabilizaci veřejných rozpočtů - Part 45–47), which three energy products are subject to environmental energy taxes in the Czech Republic?

  1. Natural gas and other gases (daň ze zemního plynu), solid fuels (daň z pevných paliv), and electricity (daň z elektřiny) Correct answer.
  2. Solar radiation, wind kinetic energy, and geothermal steam
  3. Nuclear uranium fuel rods, hydropower dam currents, and industrial hydrogen
  4. Crude oil, kerosene, and aviation gasoline

Explanation

Under Act No. 261/2007 Coll. (implementing EU Directive 2003/96/EC), energy taxes apply to three distinct energy media: Natural gas (and other heating gases), Solid fuels (coal, coke), and Electricity. Like excise duties, they are administered by the Customs Administration.