International Agreements

Czech-American Agreement on social security

At the beginning of September 2007, the Czech Republic and USA signed an agreement on social security governing the rules on participation in the social security and health insurance system by migrating persons. A fundamental principle of the Agreement is that every person will be subject to the laws of one country, being the country in which that person carries on gainful activities (work). The Agreement sets out exceptions to this rule, applicable automatically or following application. The effect of the Agreement is that persons (including USA citizens) who have an employment contract with an employer whose registered office is in the USA but work in the Czech Republic will now have to participate in the Czech social security system. The Agreement has yet to be approved by Congress and the Czech Parliament.

Instruction D-311

The Czech Finance Ministry has issued an instruction implementing the international treaty for the avoidance of double taxation between the Czech Republic and Austria, effective 1 January 2008 (as of this date, the 1978 treaty for the avoidance of double taxation between the Czechoslovak Socialist Republic and Austria will cease to apply). In certain circumstances, persons resident in one Treaty State are entitled to full exemption from taxes in the other Treaty State. There are two distinct procedures whereby Czech tax residents in Austria can take advantage of this entitlement (provided they comply with the requisite conditions) – provision of tax relief or refunds.

Treaty for the avoidance of double taxation between the Czech Republic and New Zealand

On 26 October 2007 representatives of New Zealand and the Czech Republic signed a treaty to prevent double taxation, which will come into effect on 1 January 2008 and prevent double taxation of income, namely, in the case of Czech tax residents, by the simple offset method.