Freelance in the Czech Republic 10/2017

BUSINESS (self-employed) OR EMPLOYMENT? Entrepreneur/businessman (živnostník/podnikatel) = Self-employed (osoba samostatně výdělečně činná) Business activity = continuous activities carried out independently, under one’s own name and at one’s own responsibility to achieve a profit  Trade license = „živnostenské oprávnění" does not have to mean "small business", you can have a turnover of millions and even employ own employees; you can have trade license and be employee at the same time, or put it on hold while you're employee

2 types of business 1/ Entrepreneur (živnostník), Self-employed (osoba samostatně výdělečně činná) 2/ Legal personality, limited liability company, etc. Whatever type of business you choose, you will be responsible for tax payment, health and social insurance payment

4 types of trade licenses independent (unconditioned) dependent (conditioned) craft (conditioned) concession (conditioned)

Trade license can never be issued for the following business: Agriculture production; forest and water management Author’s fees and IP rights Independent jobs (writers, actors, musicians) Business done and regulated according to special state regulation and usualy preconditioned by state exams  for example, tax advisors, lawyers, executors, brokers, interpreters, healers, etc.

Starting your business Register your business with the Trade license office (živnostenský úřad) for which you need: Passport, residence permit, copy of criminal record from criminal register (from the Czech Republic and from the country of origin), business address, 1000 CZK administration fee Register business at the Financial office (finanční úřad) for tax purposes and tax specific number (DIČ) Register with the Social Security Administration Once registering at Trade license office you can tick an option for the Trade license to register you at all the other necessary offices on your behalf

Financial office - taxes You are obliged by law to register your business with the Financial office (finační úřad) for which you need trade license copy, bank account, residency permit Every year you need to hand it tax return form by 31st March Tax return form is obligatory for every license holder If your yearly income exceeds 30 000 CZK, you will be required to pay monthly tax down payment in the next year Tax = 15% Any changes in business must be registered within 15 days

Financial office - taxes a/ tax register – you pay tax from real costs (i.e. you account for real expenditure proven by bills, invoices, etc.) b/ you pay tax from costs which are measured by pre-set flat rate calculated from percentage of income, which is very convenient and favourable Therefore there are over 2 300 000 trade license holders in the Czech republic Taxable income differs according to type of trade license 80 % craftsmen and agriculture 60 % other entrepreneurs except craftsmen and agriculture 40 % special work

Social insurance Pension insurance contribution is compulsory Sickness insurance – not compulsory (covers costs connected with loss of income during illness or pregnancy, it is NOT health insurance) Social insurance – compulsory Down payments for 2016 = 1972,- CZK/month (2061,- for 2018) Income below 64.813,- CZK requires no down payment One month after handing in tax return form one must hand in social insurance overview to Social Security Administration If you do not pay, you will have debt for which you can be sued by the state administration All changes must be registered by the 8th day of next month Social Security Administration is obliged to share changes with the Ministry of Interior and its foreigner department

Health insurance Type of health insurance depends on type of residency permit: 1. Permanent resident, employee, family member of EU resident, holder of tolerance visa, asylum, subsidiary protection  public insurance from General health care insurance, minimum min.1823,- czk/month for 2016 (1906,- for 2018) 2. Temporary resident – private insurance min 1 200 CZK/month covering the whole period of residency; private insurance companies: Slavia, Maxima, PVZP, Uniqua, Ergo All changes must be registered within 8 days

Minimum income You have to prove that your income exceeds or equals to the minimum income of all members of the household: 3410 for the individual 3140 for 1st person 2830 for next person above 15 years of age 2450 for a child between 15 – 26 years of age 2140 for a I child between 6 – 15 years of age 1740 for a child up to 6 years

Accomodation Regulated accommodation costs set by law (rent + other costs such as electricity, gas, water) 7720,- individual 11004,- two persons living in household 14896,- three persons living in household 18577,- four and more persons living in household - If you own you own apartment, obligatory accommodation costs are lower – real costs

Proving your obligations * Prove income from tax return form * Ministry of Interior may control purpose and reasons of your residency * You must be legal resident in the Czech republic for minimum 2 year

http://www.businessinfo.cz/cz/ http://jakpodnikat.cz/ http://www.podnikatel.cz/ http://portal.gov.cz http://www.imigracniportal.cz/ poradna@refug.cz