Which companies are required to prepare and publish the report?

The requirement applies to companies that meet the statutory criteria set out in Sections 32m and 32o of Act No. 563/1991 Coll., on Accounting, as amended.
In particular, it covers the following types of entities:

1. Ultimate parent company with its registered office in the Czech Republic

The obligation to prepare a consolidated income tax report applies to groups whose consolidated revenues exceed CZK 19 billion (in both the previous and the current reporting period), provided that the group includes at least one company outside the Czech Republic or that one of its subsidiaries operates a branch or permanent establishment abroad.

2. Czech subsidiary of a group whose ultimate parent is outside the EU

The obligation to prepare a consolidated income tax report also extends to any medium‑sized or large reporting entity that forms part of a group whose ultimate parent is established outside the EU, provided that the group’s consolidated revenues reach at least EUR 750 million (in both the previous and the current reporting period).

3. Standalone Czech company with a branch or permanent establishment abroad

A Czech company must prepare an income tax report if its net turnover exceeds CZK 19 billion (in both the previous and the current reporting period) and the company also operates a branch or permanent establishment abroad.

4. Czech branch of a non-EU company

The obligation to disclose an income tax report also covers a Czech branch whose turnover exceeds CZK 240 million and the turnover of the non‑EU company reaches at least EUR 750 million (in both the previous and the current reporting period).

Effective date of the obligation

This obligation applies for the first time to reporting periods beginning on or after 22 June 2024. The report must be deposited in the Collection of Deeds of the Commercial Register within 12 months of the balance sheet date (for example, by 31 December 2026 for the 2025 calendar year). The company is also required to publish on its website a link to the report as recorded in the register.

In this context, it should also be noted that the auditor is required to verify compliance with the obligation to prepare and publish these reports. This verification is carried out as part of the audit of the following reporting period (in this case, during the audit of the 2026 financial statements), and the auditor must comment on this obligation in the audit report.

What are the penalties for non‑compliance?

Failure to prepare or publish the income tax report constitutes a breach of the Accounting Act and may result in a fine of up to 3% of the entity’s total assets. In the following reporting period, the auditor will also be required to state in the audit report that the entity has failed to comply with this obligation. We would also like to draw attention to an article on our blog that discusses in more detail the consequences of failing to publish financial statements, including the tax authorities’ powers to actively seek information in cases of non-compliance.

Are there any exemptions?

Yes, although they are very limited. The most practical exemption applies to a subsidiary whose parent prepares a consolidated income tax report that is equivalent to the report required under the Accounting Act, provided that either its Czech translation or an English version is published in the register.

What does the report contain?

The income tax report / consolidated income tax report is a standardised document presenting information on a country-by-country basis. It includes in particular:

• total revenues;
• profit or loss before tax;
• income taxes paid and payable;
• accumulated profit or loss brought forward;
• headcount;
• nature of activities; and
• any accompanying explanatory narrative.

Does this content look familiar to you? The income tax report largely mirrors the Country‑by‑Country Report (CbCR), which has recently been widely discussed in connection with top‑up tax and in demonstrating compliance with the conditions of the transitional safe harbour. However, the primary purpose of these two reports is different. While the CbCR is intended for tax audit purposes, the income tax report is aimed at the general public and is designed to promote public tax transparency. It can reasonably be expected that such disclosure may trigger reputational concerns, prompting questions such as: Why is the profit so high in country X while the tax paid there is so low? Or why does the group operate in tax havens?

The report does not need to include information whose disclosure would seriously harm the reporting entity’s business position, provided that the information does not relate to “tax havens.” However, any omission must be explained in the report, and the information must be disclosed in subsequent periods, within five years.

In conclusion, if this obligation applies to you, we recommend conducting a detailed and timely analysis of the requirements under the Accounting Act, setting up appropriate processes for collecting the relevant data, and considering whether any of the available exemptions may be used.