Tax rates on an zivnostensky list
There are two basic tax options available to someone using Živnostenský List
1) You can pay tax on your actual profit. For this method you must retain proof of income and receipts/invoices to prove costs
2) You can elect to use a standard deduction. For most occupations this will be 50%. For this method you must retain proof of income but it is not necessary to retain proof of costs.
Note: There is an income limit of 3million kc per year for this option.
On a standard fysicka osoba Živnostenský List it is only ever necessary to pay tax on 50% or less of your income.
The decision you need to make will depend on the costs of running your business.
If you have high cost (over 50% of your income) and therefore a lot of receipts, then it will probably be better using option 1.
However the cost of the extra bookkeeping must also be considered
If you have low costs from your business, then option 2 is best.
If your earnings in any 12 month period exceed one million Kc then you must register for VAT.
Alternatively if you pay lots of VAT for your costs then you can register voluntarily.
In either case you are then obliged to record all costs.
In this case, you are still able to use option 2 for calculating your tax liability.
Tax returns are to be sent once a year.
Your tax return and any tax owed for the previous year must submitted to the tax office by 31 March the following year.
Tax law in any country is complicated and difficult to understand.
The Czech Republic is no different. This article is meant as a guide. It is not a legal document.
You should consult a professional accountant for exact advice.