What do you need to know once you have registered a trade licence and started your business? Where to register, and where and when to send your contribution payments. How to issue invoices and how to keep accounts or tax records? Do you have any other obligations as a new business owner? We give you a clear overview of everything.
What do you need to arrange?
Have you decided to start a business but do not know exactly where to begin, or what setting up a trade licence involves? We have covered everything in detail in the article What setting up a trade licence involves and where to do it. In this article, we explain in detail everything you need to do once your trade licence is already set up.
- Setting up a data box (datová schránka)
- Registering with the tax office (finanční úřad)
- Reporting the change to your health insurance company
- Contact from the social security administration
- Deciding where and how you will store your invoices
Setting up a data box (datová schránka)
Once you have set up your trade licence, we recommend going straight to a Czech Post (Česká pošta) branch and setting up a data box (datová schránka) for a natural person doing business, or for a legal entity. As a person who has been assigned a business ID number (IČO), you are legally required to have a data box. At the post office, you will be given your login details, and you will receive instructions by email on how to log in for the first time.
Registering with the tax office (finanční úřad)
Registration with the tax office (finanční úřad) should happen automatically when you set up your trade licence. The Trade Licensing Office (živnostenský úřad) should notify the tax office that you have started a business, so the office will register you straight away as a taxpayer and assign you a tax identification number (DIČ). Confirmation of your registration with the tax office should arrive in your data box (datová schránka). Your local tax office will be determined by your place of permanent residence.
Registering with your health insurance company
When you set up a trade licence, you must report this to your health insurance company within 8 days. You can go there in person or log in to your insurance company’s online portal. The health insurance company will give you the account number, variable symbol and amount you will send every month. As you have only just started your business, you will pay the minimum health insurance contribution.
Social security administration
Depending on whether you live in Prague, Brno or another town or municipality, you will fall under the Prague Social Security Administration (Pražská správa sociálního zabezpečení), the Municipal Social Security Administration (Městská správa sociálního zabezpečení) or the District Social Security Administration (Okresní správa sociálního zabezpečení). The relevant administration should contact you itself (via your data box) and give you the account number, a unique variable symbol and the amount you will pay every month. At the start, this will again be the lowest set rate.
What about invoices?
You need to decide whether you will issue and store invoices, for example, in a folder on your laptop, where you choose what the invoice itself will look like. You can use a template, or simply write the invoice with all the required details in Word and then convert it to a PDF file. Alternatively, you can choose an app or program for managing your invoices.
Read the article on flat-rate tax (paušální daň) and who it pays off for
Tax records or double-entry accounting?
Tax records are kept by self-employed persons (osoba samostatně výdělečně činná, OSVČ) who are not required by law to keep (double-entry) accounts and who do not claim flat-rate expenses. A self-employed person only has to keep accounts if their turnover in the previous year exceeded 25 million CZK (about 1.1 million USD). This is a simple rule, and we assume that if you are just starting a business, whether as a natural person or a legal entity, you will not reach a turnover of 25 million CZK (about 1.1 million USD) straight away. Keeping tax records will therefore be enough.
How tax works when you are self employed in the Czech Republic
As a self-employed person, you do not pay tax on everything you invoice. Your tax is based on your profit, which is your income minus your expenses. You can deduct the actual expenses you have recorded in your tax records. Alternatively, you can claim flat-rate expenses, which are a set percentage of your income rather than your real costs. If you choose the flat-rate tax, you pay one fixed monthly amount instead.
Estimating your tax with a calculator
A self-employed tax calculator helps you estimate what you will owe before you file your tax return. Most calculators work in a similar way.
- Enter your expected yearly income, for example 40,000 USD.
- Choose actual expenses or flat-rate expenses, for example actual expenses of 10,000 USD.
- The calculator works out your profit, here 30,000 USD, and estimates your income tax and your health and social contributions from it.
- Compare the result with the monthly contributions you have already paid.
Treat the result as an estimate only. A calculator can be out of date or leave out allowances you are entitled to.
Common mistakes
- Spending all your income and not setting money aside for the tax payment.
- Forgetting that your monthly contributions may rise once your profit grows above the minimum.
- Mixing personal and business payments, which makes your tax records harder to keep.
After the end of the tax period
You must file a tax return by 31 March. If you have a tax adviser, the deadline is extended to 30 June. Linked to this is the obligation to send an “overview of income and expenses” to your health insurance company and the social security administration. Each institution has its own form for this, and you can submit it electronically via your data box. The deadline for submitting the overview to the social security administration is one month from filing your tax return. The deadline for submitting it to your health insurance company is 8 April of the given calendar year.
Frequently asked questions about being self employed in the Czech Republic
What does being self employed in the Czech Republic mean?
It means you work for yourself on the basis of a trade licence instead of being employed. You invoice your clients, keep your own records and pay your own tax and health and social contributions. You also take care of the registrations and yearly reports yourself.
How is Czech Republic self employed tax calculated?
Your tax is calculated from your profit, which is your income minus your expenses. You either deduct your actual recorded expenses or claim flat-rate expenses as a percentage of your income. If you choose the flat-rate tax, you pay a fixed monthly amount instead of calculating tax from your profit.
Is a self-employed tax calculator accurate?
A calculator gives you a useful estimate, but it is only as good as the numbers you enter and the rules it uses. It may not reflect recent changes or every allowance you can claim. Use it for planning and check your final figures when you prepare your tax return.
USD amounts are approximate, converted at the Czech National Bank rate of 21.83 CZK per USD on 27 October 2026.
