Freelance i n the Czech Republic 10/2017

1. Freelance in the Czech Republic 10/2017

2. BUSINESS (self-employed) OR EMPLOYMENT? Entrepreneur/businessman (živnostník/podnikatel) = Self-employed (osobasamostatněvýdělečněčinná) Business activity = continuous activities carried out independently, under one’s own name and at one’s own responsibility to achieve a profit Trade license = „živnostenskéoprávnění" 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 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

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 2300 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

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 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

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/monthfor 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

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

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