Tax return 2024: Which credits and discounts are available to you?

If you are self-employed in Czechia, you’ll be aware that tax season is almost over, with just over a week left to complete your tax returns online. Thankfully, various tax credits and deductibles are on offer – depending on your situation – which should help lessen your tax burden this year.

We take you through the most important things to know about this year’s tax return (covering Jan. 1 to Dec. 31, 2023) and the deductions and credits you can claim.

If you were self-employed in 2023, did business for some of the year, and earned over CZK 50,000 for the whole year from self-employed activities, you will need to submit a tax return.

At the start of 2023, self-employed people who signed up for Czechia’s flat-rate tax system and had no other income (standard employment, DPP/DPČ contracts, rental income, the sale of property, and so on) are exempted from the obligation to file a tax return.

Those with a data box must submit their tax return online, via their data box. The deadline for this is Thursday, May 2. You may find and complete all electronic forms on the Moje daně (May Taxes) portal, then attach the finished forms to your data box.

You can also get a registered tax service or tax advisor to do it for you. In this case, the deadline for tax return submissions is July 1.

Income tax for self-employed people is 15 percent of their total tax base (a person’s total amount of income that can be taxed). This is calculated by summing up total income and subtracting deductibles such as tax discounts and benefits.

Those with a tax base four times above the average annual salary (over CZK 1.94 million in 2023) will have an increased tax rate of 23 percent. Only the amount over the threshold will be taxed higher, though. For example, a person with a tax base of CZK 2 million in 2023 will need to pay a 23-percent tax rate on just CZK 60,000 – the rest will be taxed at 15 percent.

When doing your tax return, self-employed people have a number of tax credits available that will see them pay less tax. However, those claiming the tax credits will usually need to submit evidence confirming the grounds for receiving them. Here is a list of what you can claim:

When calculating your total income, you can deduct some expenses from your overall tax base. These are known as deductibles and mean you will be subject to less tax overall.

The Financial Administration warns taxpayers of penalties for late or non-submission of tax returns. A delay of five working days incurs no penalty, but subsequent delays are charged at 0.05 percent of the total tax owed per day, with a maximum of 5 percent. Failure to submit a return after a request from authorities results in a maximum fine of CZK 300,000.

As a self-employed person, you must file the tax return and submit reports on your income and expenses to your health insurance company (usually VZP) and the Social Security Administration within a month of submitting your return. You can send these via your data box.

This allows the authorities to see if you have paid too little (or too much) health and social insurance contributions throughout the year, meaning you may get a tax rebate.