Imagine that a foreign company wants to pay you a bonus, a bank abroad wants to open an investment account, or you claim a reduction in withholding tax on dividends abroad. Suddenly, you come across a request that sounds innocent: provide a “certificate of tax residence”. At that point, there’s often an avalanche of questions about what tax residency is, how it differs from the concept of tax residency, and, most importantly, how to quickly and correctly get the paper they want you to sign.
We provide a clear explanation of what is meant by tax domicile in practice and how it relates to tax residence. We go through the rules for individuals and corporations and you will understand what happens when two countries consider you to be resident. You’ll also get a practical guide to what a tax residence certificate is for, when you typically need one, how to apply for one, what the application must contain, how much it costs, how delivery works and when legalisation or apostille may be required for use abroad.
In common practice, tax domicile is the designation of the country in which you are considered tax resident (i.e. where you have your tax home) – typically for the purposes of international taxation and double taxation treaties.
From a legal perspective, the concept of tax residence is key. It determines whether you typically have unlimited tax liability in the Czech Republic (you are also taxed on foreign income) or whether you are a non-resident and only deal with income from sources within the Czech Republic.
But the moment you need to prove your residency externally, the term “tax domicile” comes into play. Not because it’s a different legal status, but because in international dealings it often comes down to “where is your tax home” and how do you prove it.
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.
Domicile can sometimes be confused with the concept of domicile. Domicile is a completely different concept, which is used in the Czech environment in several areas – typically in banking and sometimes in commercial law. Most often, you will encounter it when dealing with a bank. Domicile here refers to a relationship where you are a “domiciliary client”, i.e. you have an account with the bank where your main income comes from and from which you pay most of your expenses (often in connection with a mortgage or loan).
Another meaning you may come across relates to promissory notes: the term domicile (and the domicile clause) refers to the arrangement in a promissory note that the note is payable to a third party (called the domiciliary). But this is a purely commercial context and is not related to the country of tax residence at all.
A taxpayer is tax resident in the Czech Republic if he/she is domiciled or habitually resident in the Czech Republic. A taxpayer’s “habitual residence” is defined as a stay of at least 183 days in a calendar year; a residence means a permanent apartment (owned or rented) available at any time where it can be inferred from personal and family circumstances that he or she intends to reside permanently. In disputed cases, actual presence in the Czech Republic (typically including days of arrival/departure) counts, so it is useful to have a record of residence.
In practice, think of it as physical presence in the Czech Republic during one calendar year (January-December). People often solve this by keeping a simple residence diary (perhaps in a calendar) and keeping documents for the riskier periods.
If you travel a lot, it’s a good idea to take into account that the tax office may want you to be able to prove your stay – for example, with travel documents, air tickets, proof of accommodation, work shifts, etc. The law doesn’t say what specific type of proof is required, but in general, whoever claims something should be able to prove it.
The Income Tax Act provides an important exception to this: if you are only in the Czech Republic for the purpose of study or medical treatment, the law considers you a non-resident even if you are here for the whole year.
A home is a permanent place of residence (owned or rented) that is available to you at any time, and it must be clear from your personal and family circumstances that you intend to stay there permanently – typically when you live there with your family or use the home in connection with your economic activities (employment, business).
Therefore, a permanent apartment does not mean a property in the land register or permanent residence at the office. It means that you have a realistic housing facility that is accessible and usable as a home.
For legal entities, the key is whether they have a registered office or place of management in the Czech Republic (typically the place from where everything important is realistically managed).
Think of the registered office as the official address of the company. For tax administration purposes, the registered office of a legal entity is the address under which it is registered in the Commercial Register.
In practice, this means that a typical Czech s.r.o. or a.s. with its registered office in the Czech Republic is automatically a Czech tax resident and, as a resident, is obliged to deal with the taxation of income from abroad, not just that from the Czech Republic.
The place of management is typically addressed when form and reality go against each other. A typical scenario: a company is “paper” registered abroad, but in reality key decisions are made in the Czech Republic – and vice versa.
The tax administration defines the place of management as the address of the place from which the taxpayer is managed. This is important because it points to the actual management of the company, not the postal address.
In practice, management is usually understood to mean mainly where the essential management decisions are made: where major contracts are approved, where decisions are made about investments, strategy, financing, personnel issues, where cash flow is actually managed and who has real control over the business. It’s not where someone signs a document once a month, but where the business lives as a whole.
The tax administrator typically puts together a mosaic of multiple circumstances. In practice, the situations that tend to be persuasive are those that are repetitive and make sense:
If, for example, the managing directors or the board of directors have been in Prague for a long time, key meetings are held in Prague, major contracts are concluded in Prague and the company is effectively given direction from there, it will be very difficult to explain that the place of management is in another country just because you have a virtual office there.
On the other hand, if the company is based in the Czech Republic, but the real management takes place elsewhere in the long term (typically foreign management, meetings, strategic decisions, finances), you may find yourself in a situation where the other country will consider the company as its resident. And here we come to the biggest risk: double tax residency (two states consider you resident at the same time). This is why in international relations there is often a question of whether there is a double tax treaty and how any double residence will be resolved.
A common misconception among legal entities is the idea that a branch office in the Czech Republic can request a confirmation of Czech tax domicile. This is because when a foreign founder requests a certificate for its permanent establishment/organisational unit in the Czech Republic, the request cannot be granted because it is still part of the foreign founder which is resident in another country.
Similarly, the limits work for so-called transparent entities (typically a public company and a limited partnership as a whole) – there, residency for treaty purposes is not assessed in the same way as for an LLC or an a.s.
If the Czech Republic has a double tax treaty with a second state and either state could consider you resident under its domestic rules, the treaty’s “borderline criteria” come into play. The determination is based on the typical order of: permanent home, centre of vital interests (i.e. where you have stronger personal and economic ties), habitual residence, nationality and, finally, mutual agreement between the states.
For pendlers, it is usually crucial where you have a stable background and stronger personal and economic ties (family, housing, work/business, insurance, banks, long-term contracts). Counting the days is important, but in contentious cases it often does not decide itself. If dual residence is imminent, it pays to have evidence of ties ready in advance.
Yes – especially if they claim that the real leadership (management) is with them. In practice, this arises with international structures where the “paper” headquarters and the real management are not in the same country.
That only 183 days are dealt with and the rest is underestimated. In contested cases, consistency of evidence (where you really live, where your family lives, where your job/business is, where you have insurance, bills, long term contracts, etc.) tends to be crucial.
A tax domicile certificate is a document by which the tax office confirms that you are a tax resident of the Czech Republic either on a specific date or retroactively for a specific tax period (or part thereof). The purpose of this certificate is to ensure that you (or your foreign partner) are able to set up the correct taxation of your income abroad.
The certificate is therefore used for the purpose of avoiding double taxation, in particular for claiming the benefits of double taxation treaties on income from foreign sources (e.g. royalties, dividends, interest income) and also for claiming tax benefits or for other reasons (typically business reasons – tendering, setting up a branch, assessing the establishment of a permanent establishment, etc.).
For example, for dividends, interest or royalties, taxation often works in such a way that the foreign taxpayer withholds tax directly from you (so-called withholding tax). However, if there is a double tax treaty between countries, the treaty typically allows for a lower withholding, but the payer will usually only give you the withholding once you prove you are a resident of the Czech Republic.
This is where the tax domicile certificatecomes in : for treaty states, the tax administrator confirms tax domicile either on a Czech Ministry of Finance form or on a foreign administration form that you submit.
For treaty states, it is important that the confirmation is not general. The form for confirming tax domicile is designed to make it clear to which state the confirmation relates and that it is a residence within the meaning of a specific double taxation treaty (the form therefore includes the state, the treaty number and the residency/tax domicile article).
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 certificate is also used to claim tax benefits as defined in foreign tax regulations. In practice, you may encounter this when a foreign tax authority or institution is deciding whether to apply the domestic or non-resident taxpayer regime to you. You then need to prove that you are not their resident but a resident of the Czech Republic. And the quickest solution is just to confirm your tax domicile.
But tax domicile also affects the business itself in some areas. For example, participation in a tender procedure, setting up a branch, or assessing whether you will establish a permanent establishment abroad (in layman’s terms: the “tax footprint” of a company in a foreign country, which may create an obligation to tax part of the profits there).
In practice, this has a simple scenario: you want to participate in a tender in a foreign country or conclude a major contract and the partner checks you out. In addition to business documents, he will also ask for confirmation of where your “tax home” is, as he needs to set up the obligations correctly (e.g. withholding, local registration, audit documents).
The request for a certificate does not have a prescribed form. The application can therefore be submitted in a free form, for example as a general document in an electronic submission. At the same time, however, the Tax Administration publishes sample applications that you can use.
For the purposes of double taxation treaties, the form “Certificate of the tax-payer’s residence” is used, which has the designation 25 5232 MFin and includes a reference to the relevant treaty and an article on residency.
MF Form 25 5232 is used for treaty states (where there is a double taxation treaty). However, this form cannot be issued for use in a non-Treaty State or for situations where you want a certificate for use in the Czech Republic but do not want to consider residency in the context of a specific treaty. For these cases, the tax administration issues a different certificate for non-Treaty States.
In principle, there is nothing complicated, but it is worth following a systematic procedure. The tax authorities must be clear about the period, country and purpose for which you want the certificate, and must be able to verify that you actually meet the conditions for tax residence.
The very basics are to be clear about what you are actually asking for. The model applications are based on the fact that you indicate whether you are asking for a certificate for a tax period (most often a calendar year or a specific “from-to” date) or whether you need a certificate for a specific date. At the same time, you indicate for which country you need the certificate and for what purpose.
In order for the tax office to issue the certificate, it must have the supporting documents to decide that you are a tax resident of the Czech Republic. It must therefore get a clear picture of your real ties: it asks, among other things, the date of arrival, the number of days you have been in the Czech Republic, the type of residence, whether you have a permanent flat in the Czech Republic, whether you have a permanent flat abroad, where you have income, insurance, bank accounts, loans, real estate, family, children and, for example, where the children go to school. In other words, the tax administrator puts together where your centre of life interests are and whether this is a situation where residency could arise elsewhere.
For corporations, it mainly revolves around the address of the registered office or place of effective management. The model application works with you giving an address and at the same time confirming that the place of effective management of the company corresponds to the address given (typically the registered office address entered in the public register). In practice, this eliminates the common problem of a “paper registered office” that has nothing to do with the actual management of the company.
An application for a tax domicile certificate is filed with the local tax administrator and the application must be in the Czech language. If you submit the application in a foreign language, you have to expect that translation will be involved – and this can unnecessarily prolong the whole process.
The administrative fee for issuing the original certificate is 100 CZK. You can pay it in several ways: in cash at the cash desk of the tax office, by postal order, by wire transfer to the account of the relevant tax office, or via a QR code on the MY Tax portal.
In the sample application, you choose how you will receive the certificate: you can pick it up in person, have it sent to your address, or request it to be sent electronically to your data box.
In addition, an important restriction is explicitly stated for legal entities: if you are also requesting the legalization of a certificate for the purpose of apostille, delivery to a data box cannot be chosen, as the document is subsequently forwarded or sent from the GFD.
A foreign authority, bank or business partner may ask you not only for proof of residency, but also for an apostille (or even a “superlegalization”). The reason is simple – the foreign country wants to be sure that the document really comes from a Czech public authority and is not a forgery.
The purpose of both superlegalization and apostille is to prove the authenticity of the stamp and signature on the document – not to verify the content of the document. In other words: the apostille does not say “what is in the certificate is true”, but “this signature and stamp are really from the competent authority”.
You’ll most often see this when you use a tax domicile certificate abroad as a ticket to more favorable taxation (or to get someone to even acknowledge that you should be taxed primarily in the Czech Republic).
So in practice there are three regimes:
Attention EU: there is a regulation in the EU that removes the legalization/apostille requirement for some public documents. However, its scope is quite specific – typically birth, death, marriage, residence, etc. A certificate of tax domicile is not among these typical “registry” documents. Therefore, even though you are dealing with a state within the EU, it may be that the foreign institution will still want an apostille.
When you need a document from the tax authorities to be authenticated, you first write to your local tax office (the territorial office where they keep your file), present the document or request its issue, and the tax office will then arrange for the document and a certificate of authenticity to be issued, or verify the authenticity of a previously issued document.
The tax office then forwards the document via the tax office to the GFD, where only a person who is on the register of competent persons with signature specimens and stamps kept at the MFA can make a higher certification. The GFD does not then arrange for the document to be sent to the MFA for certification. The document is returned to you after verification by the GFA (by post or by personal collection) and the next step is up to you.
First, you obtain the original certificate and at the same time start the internal verification within the tax administration (tax office → GFD). Only when you have the document certified so that the apostille can be attached to it, you go to the Ministry of Foreign Affairs. The GFD explicitly states that the legalization of documents (including the possibility of submitting an application by mail) is handled by the MFA office on Hradčanské náměstí and that the personal presence of the person in whose name the document is issued is not necessary – anyone can submit an application.
To be clear financially: as of 1 January 2025, the fees for higher verification/apostille have been increased and, following the abolition of stamps, the fees are paid by credit card in person (by bank transfer in post). Specifically, this is an increase from CZK 300 to CZK 600.
Finally, it is also important to point out that the most common “stuckness” in practice is not caused by the apostille, but by the fact that the recipient abroad wants an extra official translation (court translation) and sometimes also that the translation should follow the apostilled original (i.e. that the translator should translate the document including endorsements). It is therefore a good idea to ask the recipient for this information in advance: whether he wants an apostille and whether he also wants an official translation.
Tax domicile is in practice the designation for the country of tax residence – i.e. where you have your tax home for the purposes of international taxation and double taxation treaties. For individuals, tax residence in the Czech Republic is assessed mainly by residence (a permanent home available at any time and the intention to reside there permanently) or habitual residence for at least 183 days in a calendar year, and mere domicile is not sufficient. In the case of legal entities, the head office in the Czech Republic or the place of effective management (where key decisions are actually made) is decisive. If two states consider you a resident, the treaty’s border criteria come into play (permanent home, centre of vital interests, habitual residence, citizenship, or agreement of states).
A tax domicile certificate is an official document from the tax office to prove Czech tax residency on a specific date or for a specific period – typically to reduce foreign withholding tax (dividends, interest, licenses), to claim treaty benefits, or for the purposes of banks, authorities or business partners abroad. The application does not have a mandatory form (it can be submitted in free form). It is important to state the period, country and purpose in the application and be prepared to demonstrate why you meet the residency requirement. There is an administrative fee of 100 CZK for the original and delivery can be arranged in person, by post or in a data box (with exceptions for follow-up legalization). If the foreign country requires a higher level of verification, apostille or super-legalization may follow – for apostille, after internal verification in the financial administration, the MFA continues; as of 1 January 2025, the fee for higher verification has increased to CZK 600 and often an official translation is required.
An electronically issued certificate with a qualified electronic signature should be recognised within the EU. However, outside the EU, institutions may insist on paper.
It can be submitted – the tax administrator can confirm residency on foreign forms, but you must provide the original text + translation into Czech.
The destination country and the purpose of use (and sometimes the specific institution) are decisive. In general: if the state is under the Hague Apostille Convention regime, typically an apostille is sufficient, otherwise the super-legalization route is followed.
Towards the Czech side, yes. Here is the possibility of issuing an electronic version on the MF form with a qualified signature. In practice, however, it depends on whether the foreign recipient accepts the electronic document or insists on the paper original (or apostille).
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.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
In person and online. Just choose the appropriate service or opt for an independent consultation when you are unsure.
