1. Freelance in the Czech Republic
10/2017

2. 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

3. 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. 4 types of trade licenses
independent (unconditioned)
dependent (conditioned)
craft (conditioned)
concession (conditioned)

5. 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.

6. 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

7. 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 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

8. 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 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

9. 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 ,- 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

10. 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 CZK/month covering the whole period of residency; private insurance companies: Slavia, Maxima, PVZP, Uniqua, Ergo
All changes must be registered within 8 days

11. 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

12. 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

13. 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