What is an “income tax refund”?

5th Apr 2021

Ever heard of it? No? Check out, what it is and how you can apply for it.

Firstly, let us explain, what a tax refund is. If you are a foreigner who worked abroad, you have paid every month a part of your income as a tax advance. Actually, your employer paid this on your behalf directly to the tax office.

Tax “advance” is the keyword here. Your employer deducts every month some percentage, as set by the tax law in a foreign country. But, at the end of the year, it will be clear, that you have not worked for the entire year, or had a low income (and thus, were not supposed to pay the tax), or various tax discounts could be used in your case.

This is the reason, why your tax paid is higher than what you were actually supposed to pay. You can correct this by filing a tax return and ask for the overpaid tax back. In a lot of countries around the world, this is a possibility for any employee.

See a very simple example:

Let´s say, Maria worked in the Czech Republic for 4 months. She made a total of 71.606,- Czech Crowns and paid 6.060 as tax advance. This is confirmed on her earning document “Potvrzení” issued by her employer, at the end of the year. After we analyze all details, we calculate, that she will get back 6.060 Czech Crowns back. Why? Because she had a lower income and so, she did not have to pay any tax income. Her paid taxes will be returned to her.

Is this legal? Absolutely. No tax office would pay you any money if you were not entitled to it! It does not effect your future pension either, which is very important, and you can also go back to that country for work.

Want to know how much of your tax you get back? Use special code BLOG5 and get the precalculation for FREE.

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