Do you donate to charities, a school in your town or even a shelter? And are you interested in how to squeeze the most out of your donations in taxes – whether you are an employee, self-employed or a company?
Do you donate to charities, a school in your town or even a shelter? And are you interested in how to squeeze the most out of your donations in taxes – whether you are an employee, self-employed or a company?
We have prepared a clear and practical guide on how the deduction of donations from the tax base works, to whom donations can be made, what purposes the law supports, how to value a non-financial donation, how to distinguish a donation from a promotional item or representation, and how exactly to claim the deduction in the annual settlement or tax return. You will also learn what limits apply to individuals and corporations in 2025 and what documents to keep.
In Czech, it is often called “gift tax rebate”, but the Income Tax Act works with the concept of deducting the value of gratuitous transactions (gifts) from the tax base. It is therefore not a tax discount (which reduces the calculated tax), but a tax deduction (which reduces the tax base). Simply put: the gift does not reduce your tax directly, but first the basis on which the tax is calculated.
How it works in practice: if a donation of CZK 10,000 reduces the tax base of an employee at the 15% rate, he saves CZK 1,500 in tax; for a taxpayer in the 23% bracket, the saving is CZK 2,300.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
Individuals can deduct the value of gifts from the tax base if the gifts in aggregate exceed 2% of the tax base or amount to at least CZK 1,000 per year. An upper limit applies: up to 30% of the tax base for 2022-2026.
Donations of blood and its components and donations of bone marrow or haematopoietic cells deserve special attention. The law assigns a fixed amount to the deduction for these non-financial donations: for a single donation of blood or plasma, CZK 3,000 and for a donation of bone marrow/blood cells, CZK 20,000. The valuation is therefore set at a flat rate and is evidenced by a certificate from the medical facility.
For legal persons, the minimum value of the donation is CZK 2,000 and the upper limit temporarily increased to 30% of the tax base (instead of the usual 10%) until February 2027.
To qualify for the deduction, the donation must be for a statutorily defined public benefit purpose and to a suitable recipient. The Inland Revenue lists the following headings:
The purposes typically supported by the law include medical, humanitarian and charitable purposes, science and research, education, culture, animal protection, youth sports, fire protection, police, ecology, etc.
A monetary donation is demonstrably the easiest: you send the amount to the recipient’s account (ideally listed with a registered public collection) and receive a receipt from the donor. Always keep a bank statement or money order at the same time (especially for emergency donations).
A non-financial donation can take the form of an item (e.g. a laptop given to a non-profit organisation) or a service (free legal, IT or marketing assistance). Valuation is essential. For accounting units, the maximum deductible value for donated tangible assets is the tax amortised cost. For other non-monetary assets without a clear carrying amount, the normal price is used, typically according to the Valuation of Assets Act.
The residual value of donated fixed assets is their book value at the date of donation (cost less depreciation/amortisation).
Naturally, this applies only to individuals (the company has no blood to donate). From a tax perspective, it is a gratuitous transaction for medical purposes. You claim a flat rate deduction of CZK 3,000 per donation (whole blood and non-contributory plasma donation), or CZK 20,000 for bone marrow/stem cell donations.
In corporate practice, there is often confusion between donation, promotional item and representation. Let’s look at the basic differences:
A gift is without consideration – the donee gives you nothing in return. For the donor, it is a non-taxable expense, but he deducts it from his basis within the legal limits (see above). For a non-profit recipient, it will often be exempt gratuitous income. The purpose of donations is to support public benefit activities.
Example: an IT company scraps five refurbished laptops and gives them to an orphanage. The home gives no consideration and does not provide any advertising. The company does not count the expense but claims a deduction for the donation (for tangible assets, up to the maximum tax depreciation value).
Advertising items are not a gift in the eyes of the law, but an advertising expense. If you meet the conditions, it is a tax deductible expense (a different mechanism than the gift deduction). Typically: the item is up to CZK 500 excl. VAT/piece, it is related to promotion (logo, company brand) and it is not an excisable good.
Example: a technology start-up gives visitors to a trade fair canvas bags with its logo, a notepad and a pen in them (in aggregate up to CZK 500 excl. VAT/piece). The aim is to make the brand “wearable” after the event. These are promotional items, thus a tax deductible expense.
Please note: from 2024, the popular silent wine exemption has been abolished – a bottle of wine can no longer be considered a tax-deductible advertising item (from an income tax perspective), even if it has a logo.
Representation expenses (hospitality, refreshments, gifts over the limit or not related to promotion) are non-taxable. Thus, they do not reduce your tax base as an expense. You can provide them, but they won’t help tax-wise.
Example. There is no clear promotional function, the value is above the promotional item limit. It is a representation, i.e. a non-tax expenditure.
The question often arises: “Are gifts to employees tax deductible?” For employees, a distinction must be made between the employee’s income tax and the employer’s expense:
Christmas packages, vouchers, gift baskets, etc. They are not tax deductible for employees from their employer unless they fulfil the conditions of promotional items (up to CZK 500, promotional character, fulfilment of other legal conditions) – then they are tax deductible.
From the employee’s point of view, they tend to be taxable income unless they are specifically exempted employment benefits listed in the law (e.g. non-monetary benefits for health, sports and cultural purposes).
If you want gifts to employees to be tax deductible, stick to the rules for promotional items (price up to CZK 500 excluding VAT, promotional character, no excise duty) – whether they are employees or business partners.
For gifts, include packaging, logo printing and shipping in the price – you could easily go over the limit otherwise.
The employee has two routes. If you don’t want to file your own tax return, just ask your employer for an annual settlement of advances and provide them with a receipt for the donation – payroll usually sets an internal deadline in February (typically by mid-month). Alternatively, you can file your own return and enter the donations on the appropriate line(line 46 on the full form or line 25 on the short form).
Self-employed persons follow the same procedure as other individuals – the total of donations must amount to at least CZK 1,000 or 2% of the basis, the deduction is claimed on the return and a temporary cap of up to 30% of the basis applies. It is worth preparing a list of donations with amounts and purposes in advance to make it easier to assess whether it will be effective to add or shift something for the year.
Legal persons claim donations on their income tax return on line 260 of their tax return. It is important to keep an eye on the minimum value of CZK 2,000 per individual gratuitous transaction and the total sum within the temporary limit of up to 30% of the tax base (until February 2027). For gifts in kind entered in the donor’s books, the rule of “no more than the depreciated cost” of tangible assets applies. Therefore, it is advisable to time the gift of the property with respect to the depreciation schedule so that the deduction actually gives you the expected effect.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
The total of the donations exceeded CZK 1,000, so it meets the condition. The employer reduces the basis by CZK 7,000 in the annual settlement. If it falls within the 15% rate, it will save CZK 1,050 in tax.
A self-employed person keeps tax records and had the laptop as business property. The value of the gift is at most the tax depreciated price; it is claimed as a deduction from the tax base (not as an expense). The acknowledgement from the donor must state the description of the item, its purpose and value.
The company has a tax base of 2 million. CZK 2,000. In 2025, it can take advantage of an increased limit – up to 30% of the basis (i.e. a maximum of CZK 600,000). The donation of CZK 300,000 is therefore fully deductible on line 260 of the return. The minimum value of CZK 2,000 is met.
Without a good donation receipt, the deduction has no chance. The tax administration has long stated that the receipt must show who the recipient is, what the value is, what exactly was donated and for what purpose and when the donation was made.
For cash gifts, a bank statement or money order can be added . In exceptional situations (e.g. natural disasters), the Tax Administration also accepts alternative evidence combining the available documents – precise instructions are given in separate information and updates.
Yes. The law works with the total of donations over the period – it is important that the total exceeds CZK 1,000 (or 2% of the base). In other words, individual donations can be small, it is the total for the year that counts.
If the gifts were made from the community property, either spouse can generally claim the deduction or split it.
No. A gift is not a tax expense and cannot be claimed as both an expense and a deduction.
For VAT purposes, there is a category of small value gifts – typically up to CZK 500 excluding VAT – where the provision is not considered a supply of goods (and there is no obligation to pay output VAT) if the gift is connected with an economic activity. Note, however, that you remain in the promotional items vs. representations regime for income tax purposes.
Donations reduce the tax base (it is not a tax credit). Individuals can claim aggregate donations of CZK 1,000 or 2% of the base up to 30% of the base (2022-2026); special lump sums: CZK 3,000 for blood/plasma donations and CZK 20,000 for bone marrow/blood cells donations. Legal entities deduct donations from a minimum of CZK 2,000 up to 30% of the base (until 2/2027). Donations may be made to entities and for purposes listed by law. Monetary and non-monetary donations are possible; in-kind donations are based on the normal or book/estate value. Beware of confusion: an advertising item (up to CZK 500 excluding VAT with a promotional function) is a tax deductible expense, whereas representation (entertainment, gifts without promotion) is non-tax deductible and does not count towards the deduction for gifts. Gifts to employees are only deductible as promotional items if the limits are met.
The employee supplies a gift receipt for the annual return or includes it in the tax return; self-employed persons follow the same procedure as other FOs. Legal entities report the deduction on the return (line 260); the maximum depreciation limit applies to property. A good receipt (recipient, purpose, object/value, date) and, for cash gifts, a bank document are key. The most common errors: incorrect recipient/purpose, incomplete receipt, consideration (no longer a gift), confusion with advertising/presentation, double claiming of the same expense, incorrect valuation and exceeding the limit.
The basic rules target beneficiaries in the Czech Republic. For foreign entities, they generally apply only where the law allows it (e.g. EU/EEA and similar conditions are met). It is recommended to check with a tax advisor or directly with the Tax Administration beforehand.
Yes. When you file your own tax return, you claim the donation there – you put it on the appropriate line and attach the receipts.
Yes, a non-monetary gratuitous benefit can also take the form of a service. However, proper valuation and acknowledgement is required. In the case of accounting units, the value is based on the book value; in general, the normal price according to the valuation regulations.
Yes. Sponsorship is a business relationship with consideration (advertising, visibility), so it is a promotional expense – it is treated differently than a donation (without consideration).
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
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