Banking, Money and Taxes in Czech Republic
The banking system in the Czech Republic is modern and expats should not have too much difficulty finding their way around it.
It is relatively easy to open a bank account and apply for a credit card in the Czech Republic. Despite being a member of the EU, the country still uses the Czech crown as its currency. It is legally bound to adopt the Euro as its currency at some point in the future, but much of the Czech public is strongly opposed to this.
Money in Czech Republic
The Czech Republic’s currency is the Czech crown (Česká koruna), with its international abbreviation being CZK. The crown is divided into 100 hellers (haléřů) but coins with a value of less than one crown are no longer in use.
Coins: 1 CZK, 2 CZK, 5 CZK, 10 CZK, 20 CZK and 50 CZK
Notes: 100 CZK, 200 CZK, 500 CZK, 1,000 CZK, 2,000 CZK and 5,000 CZK
Selected chain stores, restaurants and tourist attractions may accept payment in Euros but these are few and far between, and the exchange rate at such places is often poor.
Banking in Czech Republic
Expats who plan on living in the Czech Republic for more than a couple of months will need to open a Czech bank account, especially if they are receiving their salary in korunas.
There is no shortage of banks in the Czech Republic and some banks even have services that cater to the needs of expats. The largest bank in the Czech Republic is Česká spořitelna. Some international banks such as UniCredit, Raiffeisen Bank and HSBC also operate in the country.
Bank opening hours are Monday to Friday, 8am to 5pm.
Expats will be able to use their foreign debit and credit cards in the Czech Republic; however, some smaller shops and restaurants only accept cash.
Those who need to make transfers from their home country should use a foreign exchange centre as banks do not offer good rates for large transfers.
Opening a bank account
It is not difficult for expats to open a bank account in the Czech Republic. All they need to produce is their passport and one other form of identification, although some banks might also ask for proof of address in the Czech Republic.
Expats will also need to provide an initial deposit when opening a bank account in the Czech Republic. Different banks will have different minimum amounts.
Transaction fees in the Czech Republic can be very high and are charged in addition to a monthly bank account fee.
ATMs and credit cards
ATMs in the Czech Republic are easily found in urban centres and many will have a language option, allowing expats to operate them in English or whichever language they choose. Expats should be aware that most ATMs will charge a fee, especially when withdrawing from a foreign bank account.
The Czech Republic is still very much a cash economy but credit cards are becoming more widely used. Expats should, however, inquire whether restaurants and hotels do in fact accept credit cards before attempting to make a purchase.
International credit cards are accepted in the Czech Republic but expats are eligible to apply for a Czech credit card should they wish to do so. The application process may vary from bank to bank.
Taxes in Czech Republic
Expats who spend more than 183 days within a year in the Czech Republic are considered tax residents. Those who fall into this category will be taxed on their worldwide income unless their home country has a double-taxation treaty with the Czech Republic. Expats who are not tax residents of the Czech Republic are only taxed on their income earned in the Czech Republic.
Generally, income tax is set at 15 percent. Those earning an income exceeding 48 times the average salary are liable to be charged at a tax rate of 22 percent.