- Dividends to the holding
- 0% taxunder the participation exemption
- Main conditions
- ≥ 10% for ≥ 12 monthsCzech or EU subsidiary (or treaty country)
- Without exemption
- 15%withholding tax on dividends
- Typical form
- s.r.o. or a.s.
Why founders use a holding company
- Reinvesting profits. Dividends from qualifying subsidiaries can be paid to the holding tax-free and used for new projects, instead of being taxed as personal dividends first.
- Separating risk. Each business sits in its own company, so problems in one do not threaten the others or the assets held by the holding.
- Several businesses under one roof. Easier management, financing and future sale of individual companies.
- Partners, investors and succession. Ownership can be arranged at the holding level without changing every operating company.
How the participation exemption works
Dividends received by a Czech holding company, and gains from selling shares in a subsidiary, are exempt from corporate income tax when the main conditions are met:
- the holding owns at least 10% of the subsidiary;
- it holds the stake for at least 12 months (the test can be met afterwards as well);
- the subsidiary is a Czech or EU company in an eligible legal form — or a company in a country with a tax treaty with Czechia that is taxed at a nominal rate of at least 12%.
Without the exemption, dividends are generally subject to 15% withholding tax.
Substance matters
Czech tax authorities and courts have challenged structures that were created purely to save tax. A holding structure should have real business reasons — managing several companies, separating risk, investing, succession — and be properly documented. We design structures with that in mind.
How we set it up
- Design. We map your current companies and goals and propose the structure, including the tax consequences of moving existing shares.
- Formation. We form the holding company and any new subsidiaries.
- Transfers. We arrange the transfer or contribution of existing shares and the related register entries.
- Ongoing care. Our accounting and tax team keeps the whole group compliant.
Frequently asked questions
Are dividends received by a Czech holding company tax-free?
Yes, under the participation exemption, when the holding owns at least 10% of the subsidiary for at least 12 months and the subsidiary is a Czech or EU company (or a treaty-country company taxed at least at 12%), among other conditions.
Can a foreign person own a Czech holding company?
Yes. A Czech holding company can be owned by individuals or companies from any country.
Is a holding structure worth it for a single company?
It depends on how much profit you plan to reinvest, your plans for further businesses and succession. For a single small company, the extra administration may outweigh the benefits — we tell you honestly.
What tax applies to dividends paid to individuals?
Dividends paid by a Czech company to individual shareholders are generally subject to 15% withholding tax.