Opening a business in the Czech Republic: how to obtain a Živnostenský list and pay taxes
Many Ukrainians, having settled in the Czech Republic, sooner or later think about their own business — freelancing, renovation, services, trade. Starting a business in the Czech Republic begins with choosing a form, and most often that form is the živnostenský list.
International Law Firm ZAHIST advises clients on registration of a živnostenský list and the tax obligations of OSVČ, helping them avoid typical mistakes at the outset.
It is easier to understand the rules of registration and taxation in advance than to correct mistakes after filing an application with the živnostenský úřad.
The živnostenský list is most often chosen by IT freelancers, renovation and construction tradespeople, beauty specialists, and small retail outlets — sectors that do not require share capital.
Business in the Czech Republic for Ukrainians — Živnosták or SRO
Živnostenský list (Živnostenský list) — a permit for a natural person to conduct independent business activity; the status is called OSVČ.
The choice between the two forms should take into account planned turnover, the number of future employees, and readiness to keep full accounts instead of simple records of income and expenses.
A change of form is also possible later: many entrepreneurs start with a živnostenský list and, as turnover grows and staff are hired, convert the business into an SRO.
The alternative is an SRO — a legal entity with its own assets and limited liability, but with more complex registration, accounting, and a mandatory notarial deed.
Živnostenský list — what it is and how it differs from an SRO
With a živnostenský list, the entrepreneur is liable for obligations with all personal assets, whereas an SRO shareholder risks only the capital contributed.
A živnost is arranged faster and more cheaply, requires no share capital, and suits a start-up, while an SRO is usually chosen when scaling or entering a partnership.
To register an SRO, a symbolic capital of 1 koruna per shareholder is formally sufficient; however, a notarial deed of incorporation and entry in the commercial register (obchodní rejstřík) are mandatory.
Who may register a živnostenský list — conditions for foreigners
EU citizens register a živnost under the general rules, while third-country nationals, including Ukrainians, as a rule must hold a legal status that permits business activity.
Holders of temporary protection in the Czech Republic are entitled to obtain a živnostenský list under the special provisions of the Lex Ukrajina programme applicable to this category of persons.
In practice, this means that a živnostenský list can be obtained in parallel with employment under an employment contract, if both types of activity are feasible in terms of time and do not breach the conditions of the current status.
Holders of temporary residence permits on other grounds — work, study, family reunification — should confirm with the migration authority whether the given type of permit allows independent business activity.
How to start a business in the Czech Republic — registering a živnosták step by step
Registering a business in the Czech Republic can be done in a single visit: the ohlášení živnosti is filed in person, via Czech POINT, or online through the Portál občana.
The administrative fee is 1,000 korunas for a paper filing and 800 korunas for an electronic filing, and the data are automatically forwarded to the tax office.
- Choose the type of activity — volná, vázaná, or řemeslná živnost
- File the ohlášení živnosti with the živnostenský úřad or online
- Pay the administrative fee and wait for entry in the register
- Obtain an IČO and wait for the tax office to assign a DIČ
- Register with the OSSZ and choose a health insurance fund
Documents for registering a živnostenský list and where to file the application
You will need a passport, a document confirming the right to stay in the Czech Republic, and a correspondence address — this may be rented or owned housing.
For vázaná and řemeslná živnost, proof of qualifications or experience is additionally required, whereas a volná živnost does not require such proof.
The list of free types of activity (volná živnost) covers more than eighty items — from retail trade to consulting and IT services, covering most typical needs of Ukrainians.
IČO and DIČ — what they are and when VAT payer registration is required
An IČO is assigned almost immediately after the application is filed, and a DIČ — the tax identification number — is issued automatically by the tax office within eight days.
Registration as a VAT payer is mandatory when turnover exceeds 2,000,000 korunas within 12 months; below that threshold, voluntary registration is possible for cooperation with business clients.
Separately, after registering a živnostenský list, the entrepreneur must within eight days register with the OSSZ and choose a health insurance fund if one was not chosen earlier.
Taxes in the Czech Republic for entrepreneurs — what and how much an OSVČ pays
Taxes for an entrepreneur in the Czech Republic consist of income tax and social and health insurance contributions — all three payments are mandatory for an OSVČ conducting a main activity.
The calculation base is profit — the difference between income and expenses, either actual or set according to a fixed lump-sum rate.
In addition to the basic payments, an OSVČ must keep daňová evidence — simplified records of income, expenses, assets, and liabilities, even if a cost lump sum is used instead of actual expense accounting.
Profit tax for sole traders in the Czech Republic — rates of 15% and 23%
The income tax rate is 15% on the tax base up to 1,762,812 korunas per year, and the portion of income above that threshold is taxed at 23%.
The higher rate applies only to the excess, not to the entire income, so for most small and medium živnostáks the applicable rate is 15%.
For example, with annual profit of 900,000 korunas the entire income is taxed at 15%, and exceeding the threshold concerns only entrepreneurs with profit above 1,762,812 korunas per year.
Social and health insurance for OSVČ — mandatory contributions
Social insurance is calculated at a rate of 29.2% on a base of 55% of profit, and health insurance at a rate of 13.5% on a base of 50% of profit.
Minimum monthly advances for 2026 are 3,306 korunas for health insurance and 5,720 korunas for social insurance for a main activity, regardless of actual profit.
For vedlejší činnost — activity as secondary rather than main — minimum advances are not set in the first year, which reduces the burden at the start.
| Contribution | Rate | Calculation base | Min. advance 2026 |
| Income tax | 15% / 23% | income minus expenses | — |
| Social insurance | 29.2% | 55% of profit | 5,720 korunas/mo. |
| Health insurance | 13.5% | 50% of profit | 3,306 korunas/mo. |
Instead of actual expenses, the entrepreneur may apply a fixed výdajový paušál — a percentage of income treated as cost without documentary proof.
The lump sum is convenient for those who do not want to collect and store receipts, but it does not allow real large expenses to be taken into account — for example, workshop rent or the purchase of expensive equipment.
| Type of activity | Cost lump sum | Max. income taken into account |
| Craft and agricultural | 80% | 1,600,000 korunas |
| Other business (volná) | 60% | 1,200,000 korunas |
| Liberal professions | 40% | 800,000 korunas |
| Property rental | 30% | 600,000 korunas |
How to pay taxes in the Czech Republic — deadlines and the tax return
Understanding how to pay taxes in the Czech Republic is easiest according to the reporting calendar: advance payments are made monthly, and final amounts are settled once a year.
Delay in advance payments or returns results in interest, so the dates should be entered in the calendar immediately after registration of the trade licence.
Tax advances and the annual tax return
The annual income tax return is filed at the beginning of the following year, and the final overviews for the OSSZ and the insurance company — shortly thereafter, with recalculation of the advances.
When filing through a tax adviser, the return deadlines are shifted to a later date, which provides additional time to prepare the documents.
For delay in advances or returns, the tax authority and the insurance funds charge interest for each day of default, so it is better to file documents in advance rather than on the last day.
Tax residence and double taxation for Ukrainians
An entrepreneur becomes a tax resident of the Czech Republic upon a stay of more than 183 days in a year or upon transferring the centre of vital interests there.
A double tax treaty is in force between Ukraine and the Czech Republic, so income taxed in one state is not taxed again in full in the other.
The 183-day rule applies per calendar year: if a Ukrainian stays in the Czech Republic longer than that period and carries on their main activity there, income from the trade licence is taxed under Czech rules.
How to legally reduce the tax burden — regimes for sole traders (OSVČ)
A trade licence allows several lawful ways to simplify record-keeping and reduce payments — from flat-rate tax to the choice of cost accounting method.
The choice of regime should be reviewed each year: as income grows, the profitability of a particular option may change quite markedly.
For craft types of activity with a high cost standard, the flat-rate tax (paušální daň) is often more advantageous, whereas with significant actual expenditure the ordinary record-keeping system makes it possible to reduce the tax base more strongly in a lawful manner.
Paušální daň — flat-rate tax for small business
Paušální daň combines income tax and both insurance contributions into a single monthly payment and exempts from the annual return and separate overviews.
In 2026 the first band is CZK 9,984 per month for income up to CZK 1 million, the second — CZK 16,745, the third — CZK 27,139 depending on the amount and type of income.
The regime is available only to persons who are not VAT payers, do not receive employment income above the set limit, and fall within turnover of up to CZK 2,000,000 per year.
Standard costs or actual costs — which is more worthwhile
The expenditure lump sum (výdajový paušál) replaces recording of actual costs with a fixed percentage of income: 80% for craft types of activity, 60% for other business, 40% for liberal professions.
- 80% — craft and agricultural activity
- 60% — other business activity (unrestricted trade)
- 40% — liberal professions and other independent activity
- 30% — income from rental of property
Actual costs are more advantageous where expenditure on materials, rent or equipment is high, while the standard is convenient when costs are low or difficult to document.
It is possible to switch between actual records and the standard or paušální daň each year before filing the return, but the decision may not be changed retrospectively during the year.
Legal support for starting a business in the Czech Republic
Opening a trade licence seems simple only at first glance — a mistake in choosing the type of activity or the tax regime costs more than an earlier consultation.
Lawyers of International Law Firm ZAHIST help choose between a trade licence and an s.r.o., prepare documents for registration and assist at the stage of tax registration.
- Incorrectly chosen type of activity requiring proof of qualifications
- Missing the eight-day deadline for registration with the OSSZ
- Wrong choice between actual costs and the standard at the beginning of the year
- Ignoring the VAT threshold when turnover increases
Each of these mistakes can be corrected, but usually requires additional correspondence with the authorities and loses time that could have been devoted to developing the business.
If you plan to register a business in the Czech Republic and wish to understand the tax burden in advance, our lawyers will analyse your situation and indicate the optimal format at a consultation.
We also assist clients after registration — in choosing between actual costs, the standard and paušální daň, as well as in preparing annual reporting for the tax authority and the insurance funds.
The first consultation helps avoid overpaying taxes already in the first year of activity and prepare for reporting without unnecessary stress.
