The Czech Republic has changed its attitude towards the taxation of managing directors of limited liability companies, who are not Czech tax residents. Managing directors have been taxed as employees so far; however, they will soon be taxed as members of statutory bodies. This change results in the reallocation of income into a different article of a double taxation treaty, and, as concerns certain countries, also in the application of another method of avoiding double taxation in countries of which the managing directors are tax residents. This may cause a significant increase of a tax onus on the part of e.g. persons from Germany.

To learn more about the new regulations please contact Robert Kolenak at LTA TAX