SUPERCEDED

XXIII.   Foreign Employees

CZECH ENTITY

Foreign employees of Czech entities are subject to withholding taxes similar to Czech employees. If their contract is made under foreign law, they do not have to pay medical insurance or social security with certain exceptions. 

From 2001 the expert status deduction is abolished. Consequently, foreigners are taxable on worldwide income after certain "short" periods in the Czech Republic.

FOREIGN EMPLOYER

Legally, foreign employees are subject to withholding taxes if the foreign employer has a permanent establishment. However, in certain cases, regulations have exempted such withholding. The employee is subject to filing and paying taxes. The employer/ee may be exempt from social security and medical insurance, if it is a "foreign law" employment contract.

With effect from 1/1/1998 for Czech non-resident employees, employment income is exempt from taxation if the activity duration for which the income is received is less than 183 days during any 12 consecutive months.