The corporate tax rate in the Czech Republic is 19%. Corporate income tax applies to the profits generated by all companies, including branches of foreign companies. Czech resident companies are required to pay income tax derived from worldwide sources. A 5% corporate income tax rate applies to certain investment funds, and a 0% rate applies to pension funds.
The arm’s length principle is contained in the Czech Income Tax Act 586/1992 Coll., Section 23 para 7. The OECD TP Guidelines is not implemented into the Czech tax legislation directly, but in the local TP Instruction it is recommended to use the guidance provided in the TPG.