Before payment, you need to establish how the income is classified under the double taxation treaty. For settlement payments and shares of a liquidation surplus, Czech law provides for withholding tax of 15 % on the amount less the substantiated acquisition cost of the ownership interest. However, the treaty may restrict Czechia’s right to tax the income. In Slovakia, the income is assessed under the rules for a separate tax base; Czech tax may be credited only to the extent permitted by the treaty and up to the amount of Slovak tax on that income. Check the specific treatment with a tax adviser before payment.
You have left a Czech s. r. o., or the company is being liquidated, and you are receiving money for your ownership interest as a Slovak tax resident. In Czechia, the entitlement arising on departure is called a settlement payment (vypořádací podíl), and on liquidation it is a share of the liquidation surplus. The payment is subject to both Czech and Slovak tax rules. However, whether Czechia may also tax the income, and the extent to which its tax can be credited in Slovakia, depends on how the income is treated under the double taxation treaty. Have a tax adviser check the calculation for your circumstances.
Withholding tax in Czechia
The Czech Income Taxes Act (Act No. 586/1992 Sb.) treats a settlement payment and a share of a liquidation surplus paid by a Czech company to a tax non-resident as Czech-source income (Section 22(1)(g), point 3). The rate is 15 %, and the income is reduced by the acquisition cost of the ownership interest if the taxpayer provides evidence of that cost to the company withholding the tax (Section 36(1)(b), point 1). You should therefore provide the company, before payment, with documents showing how much you paid to acquire the interest or how much you contributed.
If Czech withholding tax applies under the relevant rules, the company withholds it on payment (Section 38d(1)), and proper withholding discharges your Czech tax liability for that income (Section 38d(4)). The company must notify the tax authority of the payment to a non-resident, including where the double taxation treaty excludes taxation in Czechia (Section 38da(1) and (2)).
Before a liquidation surplus is paid out, also check the register of beneficial owners. If the beneficial owner is not registered, the Czech company may not pay the surplus to that person, as explained in the question on profit distributions without a registered beneficial owner.
Filing a tax return in Slovakia
The Slovak Income Tax Act (Act No. 595/2003 Z. z.) treats both settlement payments and shares of a liquidation surplus as taxable income and also treats a foreign entity paying equivalent income as a company for these purposes (Section 3(1)(e)). Foreign-source income is included in a separate tax base in the tax return. It is reduced by the value of the paid-up contribution or, otherwise, by the acquisition cost of the ownership interest. If the value of the paid-up contribution exceeds the amount paid out, the difference is disregarded (Section 51e(3)(a)). The rate is 7 % (Section 15(a), fifth point). Under the transitional provision, this version of the provision applies to settlement payments determined from financial statements for an accounting period beginning on or after 1. 1. 2025 and to liquidation surpluses where the company entered liquidation or a court ordered its dissolution on or after that date (Section 52zzzb(5)). For earlier periods, the rate is determined by earlier transitional provisions. Whether you must file a tax return depends on the total amount of your taxable income for the year (Section 32(1)).
A credit for Czech tax is available only subject to the conditions of the double taxation treaty and the Act:
The following quotation is reproduced in its original language:
Ak sa podľa zmluvy o zamedzení dvojitého zdanenia uplatňuje metóda zápočtu dane, daň zaplatená v druhom zmluvnom štáte sa započíta na úhradu dane podľa tohto zákona najviac sumou, ktorá môže byť v druhom zmluvnom štáte vyberaná v súlade s touto zmluvou o zamedzení dvojitého zdanenia, pričom zápočet dane sa vykoná najviac v sume dane pripadajúcej na príjmy plynúce zo zdrojov v zahraničí.
If the treaty permits the Czech tax and it is eligible for a credit, the credit is limited to the amount of Slovak tax on that income. Slovakia will not refund the excess. Tax withheld in Czechia beyond what the treaty permits cannot automatically be dealt with through a Slovak tax credit.
What the treaty between Slovakia and Czechia says
The Double Taxation Treaty between the Slovak Republic and the Czech Republic (Notice No. 238/2003 Z. z.) allows the state of the paying company to tax dividends paid to an individual at no more than 15 % of their gross amount (Article 10(2)(b)). Its definition of dividends also includes other income subject to the same tax treatment as income from shares under the law of the state of the paying company (Article 10(3)). By contrast, gains from the disposal of property are taxable only in the state of residence (Article 13(4)). Slovakia, as the state of residence, eliminates double taxation by granting a credit for tax paid in Czechia (Article 22(1)). The treaty text does not clearly establish which of these articles applies to a settlement payment or a share of a liquidation surplus. This determines whether Czechia may retain the tax. You should therefore discuss the treatment under the treaty with a tax adviser before payment.
We will prepare your exit from the company and the settlement of your ownership interest through our shareholder exit and settlement of ownership interests (in Slovak) service, and the liquidation of a Czech or Slovak company through our company liquidation and dissolution service. A tax adviser will handle the tax calculation, and we will work with you to prepare the supporting documents.
This answer provides general information on the law as at 3 October 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
