Deductible expenses for sole traders in 2026
Claiming expenses properly is the most ordinary way to bring a tax bill down legally. As an OSVČ (self-employed person, sole trader) you may deduct what your business genuinely costs you — but you have to know what counts and be able to show it. This is a plain summary of what is deductible, what is not, and when flat-rate expenses are the better choice.
What makes an expense deductible
Deductible expenses are defined in § 24 of the Income Tax Act (ZDP). An expense has to meet three conditions:
- It serves taxable income — the expense is incurred to obtain, secure or maintain income from the business
- It is supported by a document — an invoice, a receipt, a contract or a bank statement showing the expense actually happened
- It falls in the right period — it is claimed in the tax period it belongs to
An expense that meets all three reduces your tax base, and with it the income tax you owe.
The expenses sole traders claim most often
Software and digital services
For many sole traders this is now the largest line. Typically deductible:
- software licences (operating system, office suite, design tools)
- cloud subscriptions (hosting, storage, SaaS applications)
- invoicing and accounting software
- antivirus and other security software
- domains and hosting for your business website
Most licences and subscriptions are claimed in full in the year you pay for them.
Hardware and equipment
- computer, laptop, tablet
- monitor, keyboard, mouse, printer
- mobile phone
- office furniture — desk, chairs, cabinets
- small office supplies — paper, toner, envelopes
Tangible assets with an acquisition cost above 80 000 Kč cannot be claimed in one go. They are depreciated over a set period according to their depreciation group — computer equipment, for example, over three years. Anything up to 80 000 Kč is claimed once, in the year of acquisition.
Travel
Business travel is deductible, and you have two ways to claim car costs.
A) Actual costs of the vehicle:
- fuel, with receipts
- insurance (compulsory third-party and comprehensive)
- repairs and servicing
- road tax, where it applies to you
- depreciation of the vehicle
- motorway vignette
B) The flat-rate travel allowance:
Instead of actual costs you can claim a flat 5 000 Kč a month per vehicle. That figure covers everything involved in running the car — fuel, repairs, insurance. It may be claimed for up to three vehicles. If the car is also used privately, the reduced flat rate is 4 000 Kč a month, which is 80 %.
The flat rate suits you if your real car costs sit below 5 000 Kč a month, or if you would rather not keep every fuel and repair receipt.
Phone and internet
- monthly mobile tariff
- internet connection
- data services
If you also use the phone or the connection privately, only the business share is deductible. Set the split realistically — 70 % business and 30 % private, say — and be ready to explain how you arrived at it.
Professional services
- accounting and tax advice
- legal services connected with the business
- translation and proofreading
- graphic design — logo, promotional materials
- marketing and advertising, including online ads and printed business cards
- subcontracting and outsourcing
Premises
- office or coworking rent
- utilities (electricity, gas, water) in rented premises
- insurance of the premises
Working from home, you may claim the share of housing costs — rent, utilities — that corresponds to the floor area used for the business. You need to be able to justify the ratio: a study taking up 20 % of the flat means 20 % of the housing costs.
Training and development
- professional courses and training connected with the business
- professional literature — books, journals, online subscriptions
- conferences and seminars, including entry fees
The link to your trade has to be real. An English course is deductible if you need English to work with your clients. A cookery course is not, unless you work in gastronomy.
Insurance
- liability insurance for damage caused in business
- professional indemnity insurance
- insurance of property used for the business
What is not deductible
Some costs stay outside the tax base even when they clearly relate to the business:
- Personal spending — clothing, unless it is protective workwear; restaurant meals, which a sole trader may claim only in specific circumstances; personal care
- Fines and penalties — fines from authorities and late-payment penalties. Contractual penalties are the exception: those that were agreed and paid can be deductible.
- Entertainment and hospitality — catering, refreshments and gifts. The one carve-out, under § 25(1)(t) ZDP, is promotional items up to 500 Kč a piece carrying your name or trade mark and not subject to excise duty.
- Shortages and damage — to the extent they are not covered by compensation received
- Your own social and health insurance — advances on your own contributions are not a deductible expense for a sole trader keeping tax records
- Income tax itself
Splitting mixed private use
If an asset or a service serves both the business and your private life, only the business share is deductible. The usual cases:
- Car — used 70 % for business and 30 % privately, you claim 70 % of actual costs, or the reduced flat rate of 4 000 Kč instead of 5 000 Kč
- Mobile phone — you set the business-to-private ratio yourself
- Computer — private use reduces the claim
- Home — the ratio of the study's floor area to the whole flat
Set the ratio honestly and keep whatever supports it. The tax office can challenge a ratio that does not look plausible.
Keeping the records
Claiming actual expenses means keeping records as you go. Every expense needs:
- an invoice or receipt — evidence of the purchase
- a bank statement or cash receipt — evidence of payment
- a contract — for recurring payments such as rent or a subscription
In Taxorio each expense goes into a category, grouped as IT & technology, operations, travel & transport, professional services, business, trade & materials, education, non-deductible expenses and other — and you record the supplier, the amount, the VAT if you are registered, and the share of business use. That gives you the shape of your spending during the year and the figures you need when the return comes round.
For paper documents there is AI recognition: photograph a receipt or an invoice and the supplier, the IČO (business ID) and the amounts including VAT are filled in for you to check and confirm rather than retype. Mobile scanning works through a QR code — scan the code shown in the app with your phone camera and photographs of documents are transferred into the system.
Flat-rate expenses instead
If you would rather not record every document, you can claim flat-rate expenses: a percentage of your income, deducted without proving individual costs.
The rates in 2026
- 80 % of income — craft trades, agriculture, forestry and water management, capped at 1 600 000 Kč
- 60 % of income — other trades, which covers most sole traders in services, IT and consulting, capped at 1 200 000 Kč
- 40 % of income — income from other independent activity such as author's royalties, interpreting and expert work, capped at 800 000 Kč
- 30 % of income — rental income, capped at 600 000 Kč
When the flat rate wins
Flat-rate expenses pay off when your real costs are lower than the percentage. Take a freelance programmer with 1 200 000 Kč of income a year and 300 000 Kč of actual expenses, which is 25 % of income. At the 60 % flat rate the deduction is 720 000 Kč — 420 000 Kč more than the real costs. The tax base falls from 900 000 Kč to 480 000 Kč.
What you give up
- Nothing is deductible beyond the percentage — if your real costs exceed the flat rate, you are paying tax on money you actually spent
- You still record income — flat-rate expenses do not remove the duty to keep records of income and receivables
- Documents still matter — you need them if you ever want to compare, and to prove the income side
The restriction that once stopped anyone using flat-rate expenses from claiming spouse relief or the child tax credit has been repealed and does not apply for 2026. The choice between actual and flat-rate expenses is now purely arithmetic.
Depreciating long-term assets
Tangible assets costing more than 80 000 Kč cannot be claimed as a one-off expense. They are depreciated over the period set by their group:
- Group 1 (3 years) — computers, office equipment
- Group 2 (5 years) — passenger cars, furniture
- Group 3 (10 years) — machinery and apparatus
- Group 4 (20 years) — buildings of timber and plastic
- Group 5 (30 years) — buildings other than groups 4 and 6
- Group 6 (50 years) — office buildings, department stores
Tax depreciation of intangible assets was abolished in 2021 with the repeal of § 32a ZDP. In tax records, spending on software and licences is now claimed in one go as an ordinary expense, whatever it cost.
Depreciation can be straight-line, the same amount every year, or accelerated, weighted towards the early years. You pick the method when the asset enters your records and it cannot be changed afterwards.
Five habits worth having
- Do the arithmetic on actual versus flat-rate expenses. You decide when you file, and the decision can be different every year.
- Record expenses as they happen. Leaving them to the end of the year turns a five-minute task into a weekend.
- Keep the documents anyway. Even on flat-rate expenses. The retention period is at least three years, and ten years for VAT documents.
- Be honest about mixed use. An implausible ratio is the easiest thing for an inspector to pull on.
- Ask an adviser about the hard cases. Depreciation, vehicles and foreign income are where a consultation pays for itself.
Records are not only about tax. Knowing what you spend on software, hardware, travel and services is what lets you price work properly and plan the next year. Categorised expenses in Taxorio give you that picture on the dashboard without extra work.
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.