Profit share / dividend (podíl na zisku)
The part of a business corporation's profit paid out to shareholders on the basis of a general meeting decision under § 34 of Act No. 90/2012 Coll., on business corporations; in a joint-stock company it is called a dividend. For an individual, 15 % withholding tax is deducted under § 36 of the Income Tax Act. Some banks accept it as income for a mortgage, usually as an average of payouts over recent years.
Example
A shareholder in an s.r.o. pays himself a profit share of CZK 600,000 every year. After 15 % withholding tax he keeps CZK 510,000, i.e. CZK 42,500 a month. A bank that recognises profit shares counts this as income and, at an internal threshold of 45 %, allows payments of around CZK 19,000. If he skipped a payout in one of the years assessed, though, the average falls sharply, and the loan with it.
In practice
Banks usually want the general meeting's decision on profit distribution, a bank statement showing the payout credited, the financial statements and the company's tax return. The money has to have actually left the company and reached you. A one-off payout decided just before applying rarely convinces a bank, which wants to see regularity over several years.
How it differs
Director's remuneration is paid monthly for holding the office and taxed like a salary. A profit share is a return on owning the company, paid out from time to time once the financial statements are approved. For combining both sources, see company director (jednatel s.r.o.).
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