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Navigating the Czech tax system can be daunting, especially for expat freelancers who might not be fluent in the language. What makes the task outright scary is that some of the official websites associated with filing taxes have no - or only partial - English language version.
From understanding different types of freelance taxes to deciphering Czech tax terminology, here's a guide to help expats file their taxes in Czechia with ease.
What if you freelance in Czech but don't speak the language?
Even if you freelance in Czech but don't speak the language, understanding local tax terms like "daň z příjmu" (income tax) and "živnost" (trade license) is crucial for navigating the Czech tax system.
Terminology glossary
- Daň z příjmů (Income Tax)
- Živnost (Trade License)
- OSVČ (Self-employed Person)
- Živnostník (Freelancer)
- Paušální daň (Flat Rate Tax)
- Daňové přiznání (Tax Return)
- Daňová správa (Tax Authority)
- Sociální pojištění (Social Insurance)
- Zdravotní pojištění (Health Insurance)
- Daňové odpočty (Tax Deductions)
- Slevy na dani (Tax Credits)
The Tax Organs in Czechia Explained
From the Tax Authority overseeing compliance to the Ministry of Finance setting policies, each entity plays a vital role in the taxation process.
- Daňová správa (Tax Authority): Responsible for overseeing tax collection and enforcing tax laws, ensuring compliance with regulations.
- Daňový portál (Tax Portal): An online platform facilitating various tax-related activities, including submitting tax returns, accessing tax information, and making payments.
- Ministerstvo financí (Ministry of Finance): Sets tax policies, manages the national budget, and oversees financial matters, including taxation.
- ePortál ČSSZ (ePortal of the Czech Social Security Administration): Allows freelancers to submit income and expense reports required by the Czech Social Security Administration online.
- Zdravotní pojišťovna (Health Insurance Company): Manages health insurance contributions and benefits for individuals, including freelancers, ensuring they meet healthcare obligations.
Brief Step-by-Step Process of Declaring Freelance Taxes in Czechia
Now that you’ve learned the what and where of the Czech tax system, let’s find out how you actually file them. Here's a concise guide breaking down the process step by step, ensuring clarity and ease in meeting tax obligations.
1. Filing Tax Return Electronically:
- Use data mailbox, EPO application, or tax information mailbox.
- Submitting via data mailbox is mandatory if set up by law.
- Penalty for non-compliance: CZK 1,000.
2. Submitting Income and Expense Overview to ČSSZ:
- Utilize ePortál ČSSZ.
- Log in using your business data box.
- Confirm the provided data.
3. Submitting Income and Expense Overview to Health Insurance:
- Access MojeVZP portal.
- Fill in necessary details or upload the electronic form.
- Verify and submit.
4. Filing Tax Return for Personal Income:
- File electronically via Moje daně or data mailbox.
- Register with a verified identity.
- Confirm submission electronically or in person.
5. Tax Deductions and Credits:
- Deduct eligible expenses like pension contributions, life insurance premiums, mortgage interest, donations, and education expenses.
- Claim tax credits for individuals, children, spouses, students, and charitable donations.
6. Calculating Taxable Income for Self-Employed:
- Determine income and subtract expenses.
- Consider flat-rate deductions or actual expenses.
- Further reduce taxable income with eligible deductions.
Freelance Tax Declaration Deadlines
When it comes to deadlines for filing taxes in Czechia, they vary depending on the chosen method of submission. Typically, paper returns must be filed by April 2nd, while electronic submissions have a deadline of May 2nd.
Additionally, it's important to note that overviews of health insurance and social security contributions should be provided within a month after submitting the tax return.
Filing Taxes in Czechia Without Speaking Czech
Managing tax obligations in Czechia can be challenging, especially for expat freelancers who don't speak the language. However, with services like živno tailored for expats, handling invoicing and tax responsibilities becomes more manageable even without proficiency in Czech. živno simplifies the process by streamlining invoicing tasks, handling exchange rates, and ensuring all necessary information is included on invoices.
