From 2026, withholding tax on the remuneration of non-residents serving in board roles will end. What does this mean in practice?

As of 1 January 2026, an amendment to the Income Taxes Act will take effect, fundamentally changing the taxation of remuneration for individuals serving on the statutory and supervisory bodies of Czech companies who are not tax residents of the Czech Republic. Instead of withholding tax, advance tax will newly apply — the same regime used for tax residents.

What exactly is changing

Remuneration of non-residents for serving on statutory and supervisory bodies will no longer be subject to withholding tax, but to advance tax.

The change applies from 1 January 2026 and stems from an amendment to the Income Taxes Act.

Impact on tax calculation and obligations

The aim is to unify the tax regime regardless of tax residency.

In practice, this means a different method of calculating and remitting tax and, in some cases, higher tax burden.

If annual income from this activity exceeds 36 times the average wage (CZK 1,762,812 for 2026), a higher 23% income tax rate applies.

Non-residents with income above this threshold will also newly be required to file a tax return in the Czech Republic.

Why the change is happening

The change follows the Ministry of Finance’s long-term effort to unify the rules for taxing employment-type income and to strengthen tax fairness. The previous withholding tax system was seen as imprecise and often led to unequal treatment between residents and non-residents, especially for individuals with high remuneration in statutory roles.

What this means in practice

For companies and board members, this means the need to adjust processes for calculating and remitting tax and to account for the fact that the overall tax burden may be higher in some cases.

Want to be sure your taxes are in order? We at PKF APOGEO will be happy to help.

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