BANKING MONEY AND TAXES IN CZECH REPUBLIC

Money

The official currency of the Czech Republic is the Czech Crown (koruna), abbreviated as Kc, with the international abbreviation CZK. Sometimes it is also possible to pay with Euros ,but the exchange rate may be slightly unfavorable and change is almost always given only in Kc. The Czech Republicís currency is the Czech Crown and is abbreviated CZK. The Crown is divided into 100 Haler but coins with a value of less than one Crown are no longer used. Coins come in denominations ranging from one CZK to 50 CZK and notes from 100 CZK to 5,000 CZK. Some restaurants, hotels and tourist attractions in large cities like Prague will accept Euros as a form of payment, but expats should be aware that the exchange rate in restaurants and hotels is poor.

Banking System

The banking system in the Czech Republic is quite modern and expats should not have too much difficulty figuring it out. Expats can quite easily open a bank account and apply for a credit card in the Czech Republic. The country still uses the Crown as its currency but Euros are accepted in some areas and the Czech Republic is expected to make the conversion to Euros by 2020. Expats who plan on living in the Czech Republic for more than a couple of months will find that they will need to open a Czech bank account, especially if they are receiving their salary in Koruna. There is no shortage of banks in the Czech Republic and some banks even have services that cater to the needs of expats. The largest bank in the Czech Republic is Ceska Sporitelna. Bank opening hours are Monday to Friday, 8am to 5pm.

Expats will be able to use their foreign debit and credit cards in the Czech Republic; however, some smaller shops only accept cash.

Opening a bank account

It is not difficult for expats to open a bank account in the Czech Republic. All they need to produce is their passport and one other form of identification. Some banks might also ask for proof of address in the Czech Republic. Expats will also need to provide an initial deposit when opening a bank account in the Czech Republic. Different banks will have different minimum amounts. Transaction fees in the Czech Republic can be very high and are charged in addition to a monthly bank account fee.

ATMs and credit cards

ATMs in the Czech Republic are known as bankomats and many will have a language option, allowing expats to operate them in English, or whichever language they choose. Expats should be aware that most ATMs will charge a fee, especially when withdrawing from a foreign bank account. The Czech Republic is still very much a cash economy but credit cards are becoming more widely used. Expats should, however, inquire whether restaurants and hotels do in fact accept credit cards before making a purchase. International credit cards are accepted in the Czech Republic but expats are eligible to apply for a Czech credit card should they wish to do so. This process may vary from bank to bank.

Taxes In Czech Republic

Expats who spend more than 182 days within one year in the Czech Republic become tax residents. Those who fall into this category will be taxed on their worldwide income unless their home country has a double-taxation treaty with the Czech Republic. Expats who are not tax residents of the Czech Republic will only be taxed on their income earned in the Czech Republic.

Taxation of Foreigners in the Czech Republic

Your tax status in the Czech Republic depends on your status of residency. Every person who has a permanent abode in the Czech Republic where he or she spends more than 183 days within one calendar year is considered a resident for tax purposes. This means that you will be taxed on your worldwide income in the Czech Republic. If your habitual residence remains outside the countryís borders, you will only be taxed on income from sources in the Czech Republic. Resident employees are taxed at a flat rate of 15% on their personal income. The tax base is formed by the so-called super gross wage, which is your gross wage increased by the amount corresponding to the obligatory contributions to social and general health insurance made by your employer. The maximum rate is 34%.

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