Change in withholding tax payment
Owing to a change in
of 2 December 2003
amending Act No. 586/1992 Coll., on income taxes, as amended, and some other acts
Article 36(2)(a)(1) reads as follows:
'1. on dividend income, for taxpayers pursuant to Article 2 on interest income from bonds, 35a) on a bill of exchange issued by a bank to secure a receivable arising from a creditor's deposit, a certificate of deposit and a deposit equivalent thereto,35b) except for interest income from a bond issued abroad by a taxpayer domiciled in the Czech Republic or by the Czech Republic to the taxpayer referred to in Article 2(2)".
In accordance with the above, the levying of withholding tax on interest income paid to legal entities from bonds has been terminated (see Article 4(4) of Act No. 591/1992 Coll., on Securities, and Act No. 530/1990 Coll., on Bonds). Withholding tax shall therefore hereafter be levied during the payment of interest income from bonds to natural persons except for interest income from a bond issued abroad by a taxpayer domiciled in the Czech Republic or by the Czech Republic to a taxpayer pursuant to Article 2(2) of the Income Tax Act (a natural person resident in the Czech Republic or usually dwelling there and having tax liability for income from both Czech sources and foreign sources - a tax resident of the Czech Republic). This approach shall be applied for the first time for income subject to withholding tax starting on 1 January 2004.