Many Czech companies have a director (jednatel), board member or supervisory board member who is not a Czech tax resident: a manager of the foreign parent company, a founder who moved abroad, or an investor's representative after a funding round. For years, their fee was simple to handle. That changed with the start of 2026.
The old rule: 15% and done
Until the end of 2025, a fee paid to a non-resident for being a member of a body of a Czech company (statutory or supervisory body) was taxed with a final withholding tax (srážková daň) of 15%. The company deducted it and paid it to the tax office, and that was the end of it: no Czech tax return, no tax credits, and the same 15% regardless of the amount.
The new rule from 2026: advance tax, like a salary
From 1 January 2026, the withholding tax for these fees was replaced by an advance tax (zálohová daň), as part of the law that also introduced the unified monthly employer report (Act No. 323/2025 Coll.). In practice:
- The company calculates a monthly tax advance from the fee, as in normal payroll: 15%, and 23% on the part above 146,901 CZK a month (in 2026).
- The tax is no longer final. The fee becomes part of the director's Czech tax base for the year.
- A non-resident director may now claim tax credits and deductions, which the old withholding tax did not allow: at least the basic credit for the taxpayer, and more if the conditions below are met.
- Above an income of 36 times the average wage a year (1,762,812 CZK in 2026), the director must file a Czech tax return. Below it, filing can still pay off to claim credits.
Only individuals are affected. A company (a legal entity) acting as a board member is taxed as before.
A second step follows in 2027: the withholding tax on small employment income (DPP agreements and small part-time jobs without a signed tax declaration) also ends, and those incomes move to advance tax as well. See DPP and DPČ in 2026.
Which tax credits a non-resident can claim
- The basic credit for the taxpayer (30,840 CZK a year in 2026): available to non-residents too, monthly through payroll once they sign the tax declaration with the company.
- Credits for children and a spouse, and deductions such as mortgage interest or pension savings: only for residents of an EU or EEA country who earn at least 90% of their worldwide income in the Czech Republic, and only in the tax return.
Taxed twice? The tax treaty decides
Almost every double tax treaty lets the country where the company is resident tax directors' fees. The Czech Republic keeps that right; the director's home country then gives a credit for the Czech tax, or exempts the income. What changed in 2026 is the Czech tax itself: it can now be higher than 15% for large fees, or lower when credits apply, so the credit at home changes too. The first step is always to establish the director's tax residency correctly: see tax residency and the 183-day rule and foreign income and double tax treaties.
Social security and health insurance
A director's fee is in principle subject to Czech social security and health insurance, like a salary. A director who lives and works in another EU country may stay insured there instead, with an A1 certificate from the home country's social security office; outside the EU, a social security agreement can decide. This depends on your situation; ask a tax advisor. This did not change in 2026, but it is worth checking now that the payroll is being reviewed anyway.
What the company has to do
- Process the fee through payroll every month, with advance tax, and report it in the new unified monthly report.
- Offer the director the tax declaration (prohlášení poplatníka) so the basic credit can be applied.
- Give the director the yearly overview of income and tax (potvrzení o zdanitelných příjmech), needed for the Czech return and usually also in the home country.
- Decide who arranges and pays for the director's Czech tax return, if one is needed. Many companies take this on as part of the director's agreement.
We run payroll for Czech and foreign companies, including fees of directors living abroad: see payroll and employees, and the personal income tax return for the director's own return.
This guide is general information, not personal tax advice. Taxbot answers follow-up questions from our guides: ask Taxbot.
Related
- Payroll and employees (our service)
- Paying yourself from your s.r.o.: salary, director's fee or dividends
- Foreign income and double tax treaties
- Net salary calculator
Official sources: Income Tax Act No. 586/1992 Coll., §6, §22, §36 and §38g (zakonyprolidi.cz); Act No. 323/2025 Coll.; Financial Administration (financnisprava.cz).
