Taxes · · 10 min read

Income tax for the self-employed in Czechia 2026

How Czech sole traders are taxed in 2026: the 15% and 23% bands, tax credits, flat-rate expenses, advance payments and how to file the DPFDP7 return.

The short version

A sole trader in Czechia — an OSVČ (osoba samostatně výdělečně činná, a self-employed person) — pays 15 % income tax on the tax base in 2026, and 23 % on the part of the base above the second-band threshold. The tax base is income minus expenses, and expenses are either the real ones you can document or a flat percentage of income (30–80 %). From the calculated tax you then subtract credits: the basic taxpayer credit of CZK 30,840 a year, up to CZK 24,840 for a spouse, and the child allowance, which can turn into a cash bonus. Advance payments kick in once your last known tax liability exceeds CZK 30,000.

The rest of this article covers the two bands, the credits and deductions available, how to choose between real and flat-rate expenses, the deadlines, and the mechanics of filing.

The two income tax bands in 2026

Personal income tax in Czechia is progressive, with two bands:

  • 15 % — the standard rate, applied to the tax base up to the threshold
  • 23 % — the higher rate (a full second band since 2024, § 16(2) of the Income Tax Act), applied to the part of the base above 36 times the average wage

For 2026, 36 times the average wage works out at roughly CZK 1,762,812. The base up to that figure is taxed at 15 %, anything above it at 23 %. Note that the threshold applies to the total tax base — the sum of the partial bases from all your sources of income — not to gross turnover.

Example: a sole trader with an annual tax base of CZK 2,200,000 pays 15 % on the first CZK 1,762,812 or so (about CZK 264,422) and 23 % on the remaining CZK 437,188 (about CZK 100,553). Tax before credits therefore comes to roughly CZK 364,975.

You can try the numbers for your own situation in the income tax calculator.

Working out the tax base

The base for income from self-employment (§ 7 of the Income Tax Act) is income minus expenses. You have two ways of claiming those expenses, and you can switch between them from one year to the next.

1. Real expenses

If you keep tax records (daňová evidence) or full accounts, you claim the expenses you actually incurred to earn, secure and maintain your income. That means recording every expense, keeping the document behind it, and being able to show how it relates to the business.

Real expenses pay off when your running costs are high — office rent, subcontractors, materials, equipment.

2. Flat-rate expenses

The alternative is to claim a fixed percentage of your income as expenses and skip the documentation entirely. The percentage depends on the type of activity:

  • 80 % — craft trades, agriculture, forestry and water management
  • 60 % — other trade licences (unqualified, qualified and concession trades)
  • 40 % — income from other business activity under special legislation, author's royalties, income of experts and interpreters. Capped at CZK 800,000.
  • 30 % — income from letting assets held as business property. Capped at CZK 600,000.

Flat-rate expenses mean less paperwork and are often the better deal for sole traders with low real costs — typically developers, consultants, translators and designers. An IT consultant with income of CZK 1,500,000 and real costs of CZK 200,000 gets a base of CZK 600,000 using the 60 % flat rate (CZK 900,000 of expenses), against CZK 1,300,000 using real expenses.

Worth knowing: claiming flat-rate expenses does not by itself block the spouse credit or the child allowance. Each credit has its own conditions — since 2024 the spouse credit additionally requires a child under 3 in the shared household.

Tax credits and the child allowance

Credits are subtracted from the tax you have already calculated, not from the base:

Basic taxpayer credit

Every taxpayer is entitled to CZK 30,840 a year (CZK 2,570 a month). You claim the full amount whether you were in business for the whole year or only part of it. This is the one credit everybody uses.

Student credit (abolished from 2024)

The CZK 4,020 student credit was repealed by Act No. 349/2023 Coll. (the consolidation package) with effect from 1 January 2024. The last year it could be claimed was 2023; it is not available for 2024 or later.

Child allowance

For a dependent child living in your household you can claim:

  • CZK 15,204 for the first child
  • CZK 22,320 for the second child
  • CZK 27,840 for the third and each further child

The amounts double for a child holding a ZTP/P disability card. If the allowance exceeds your tax liability, the difference is paid out as a tax bonus. Since 2021 the bonus is no longer capped by law — the whole excess is paid out.

Other credits

  • Disability credit — CZK 2,520 (first and second degree) or CZK 5,040 (third degree)
  • ZTP/P card holder credit — CZK 16,140
  • Spouse credit — CZK 24,840, if your spouse's income did not exceed CZK 68,000 for the year and they care for a dependent child under 3 living in the shared household. If the spouse holds a ZTP/P card, the credit doubles to CZK 49,680.

Deductions from the tax base

Separately from the credits, some items are deducted from the base before tax is calculated:

  • Mortgage interest — up to CZK 150,000 a year (for loans taken out from 2021)
  • Donations — where the statutory conditions are met, donations of up to 30 % of the tax base can be deducted for the 2026 tax period
  • Pension savings (third pillar) and the DIP — contributions to supplementary pension insurance, supplementary pension savings or the long-term investment product (DIP)
  • Life insurance — premiums paid, on condition the policy runs to at least age 60

Combined cap since 2024: pension savings, the DIP and life insurance together are capped at CZK 48,000 a year (Act No. 349/2023 Coll.).

Filing deadlines

The deadline for a personal income tax return depends on how you file:

  • 1 April 2027 — the basic statutory deadline for the 2026 tax year
  • 3 May 2027 — the expected end of the extended deadline for electronic filing, because 1 May falls on a Saturday
  • 1 July 2027 — the statutory deadline where a statutory audit applies, or where a tax adviser files on your behalf and the conditions are met
As of August 2026: the Financial Administration had not yet published its annual calendar of filing dates for the 2026 tax year. The dates above follow from the statutory deadlines and the calendar; confirm them against the Financial Administration's tax calendar before you file. If you have a data box (datová schránka) set up for you by law, form submissions must be made electronically in the prescribed format.

The tax itself is due on the same dates. File late and you face a penalty for late submission — 0.05 % of the assessed tax for each further day of delay, up to 5 % of the tax. Our deadline overview lists the dates for the current year.

Filing step by step

Step 1: gather the paperwork

To complete the return you need:

  • A summary of your income from self-employment for the whole year
  • A summary of expenses, if you claim real ones
  • Confirmation of income tax advances already paid
  • Documents for the deductions — interest statements, donation receipts, pension savings confirmations
  • If you were also employed, the income confirmation from your employer

This is the step that rewards keeping records as you go. If your invoicing software also tracks expenses, the figures are already there.

Step 2: fill in form DPFDP7

The personal income tax return is filed on form DPFDP7 (type designation MFin 5405). You can complete it:

  • Electronically through the MOJE daně portal (mojedane.cz) or EPO, the Financial Administration's electronic filing system
  • On paper, using the pre-printed form — but note the shorter deadline
  • Through software that generates the XML file for electronic filing

Some invoicing and accounting programs produce the supporting figures or the XML itself. On the PRO plan, Taxorio generates a minimal DPFDP7 XML for the basic sole-trader case: § 7 income, one main activity, and the basic taxpayer credit. Anything beyond that — employment income, rent, capital or other income, children, a spouse, donations or the other deductions, and income tax advances you have already paid — is not in the file and has to be added and checked in the MOJE daně portal before you submit. The CSV income and expense book, which you can hand to an accountant or use to fill the form in by hand, is available on every plan.

Step 3: submit the return

Submit through your data box or the MOJE daně portal. If your data box was set up for you by law, form submissions must be electronic and in the prescribed format. Paper filing only remains an option for someone the mandatory electronic form does not apply to.

Step 4: pay the tax

Pay the assessed tax to the account of your local tax office. The account numbers and the prefixes for each type of tax are published on the Financial Administration's website. Use the right variable symbol — your birth number or your IČO (business ID), depending on what the tax office instructs.

Income tax advances

Once your last known tax liability exceeds CZK 30,000, you start paying advances on next year's tax:

  • Tax of CZK 30,001 to 150,000 — half-yearly advances of 40 % of the last known liability, due on 15 June and 15 December
  • Tax above CZK 150,000 — quarterly advances of 25 % of the last known liability, due on 15 March, 15 June, 15 September and 15 December

Advances are credited against the final liability when you file.

Social security and health insurance

Income tax is not the only payment a sole trader makes. Both social security and health insurance contributions are derived from the same tax base.

Social security

The assessment base is at least 55 % of the tax base from self-employment, and the contribution rate is 29.2 %. The minimum monthly advance for a main activity in 2026 was originally announced as CZK 5,720; an amendment reduced it retroactively to CZK 5,005 a month. How advances already paid at the higher figure are settled is something to check against the ČSSZ instructions.

Health insurance

The assessment base is 50 % of the tax base, the rate is 13.5 %, and the minimum monthly advance for 2026 is CZK 3,306.

The annual statements (přehled) of income and expenses for the ČSSZ and your health insurance company are due within one month after the deadline for filing the tax return.

Practical points

  1. Compare real and flat-rate expenses. Run both calculations and take the better one. The choice can be made afresh each year.
  2. Use the deductions. Pension savings, life insurance and donations reduce the base.
  3. Record expenses as they happen. Leaving it to the end of the year is how legitimate expenses get forgotten and documents get lost.
  4. Watch the deadlines. Late filing or late payment means penalties that were entirely avoidable.
  5. Consider a tax adviser. For anything complicated — several kinds of income, foreign income, investments — a professional is worth the fee, and filing through an adviser also gives you a later deadline.

Taxorio has a tax calendar of upcoming deadlines and a dashboard with income and expenses for the current period, so you can see where you stand without assembling it by hand.

Summary

Sole traders in Czechia are taxed at 15 % and 23 % in 2026 depending on the size of the tax base. What makes the difference in practice is choosing correctly between real and flat-rate expenses, claiming every credit and deduction you are entitled to, and keeping records throughout the year rather than in March. Meeting the filing and payment deadlines is what keeps penalties off the table.

If your situation is anything other than straightforward, put the question to a tax adviser before you file rather than after.

Official sources

Taxorio scope: Taxorio provides invoicing and income/expense records for Czech sole traders. It is not full accounting or personalised tax advice. For an unsupported or unusual case, verify the treatment with a Czech accountant or tax adviser before filing.