Consultants and advisers are an unusual kind of OSVČ (self-employed person) in tax terms. What they sell is mainly their time, knowledge and experience — not materials, not goods, not hours at a machine. Two consequences follow, and between them they reshape the whole tax strategy: a high margin and very few costs. Low costs are exactly why the standard advice to "put everything into your expenses" tends not to work for a consultant. When you barely have real expenses, the better regime is the one that lets you stop thinking about costs altogether.
This guide works through a consultant's tax logic step by step: why the flat tax or a percentage-based expense rate usually wins, how to handle DPH (Czech VAT) on work for clients abroad, what you can actually deduct when there is little to deduct, and how to set prices and invoicing so that more of the margin stays with you. It applies to IT consultants, business and marketing advisers, trainers, freelance project managers, and tax and HR specialists alike.
What makes consultants different: high margin, low costs, mostly B2B
Before the numbers, it is worth naming what sets a consultant apart from most other trades:
- High margin. The gap between what you invoice and what the job actually costs you is enormous. A consultant sells time and know-how, not resold goods carrying a few percent.
- Few costs. Laptop, phone, software, the occasional trip or course — that is usually the whole list. No warehouse, no materials, no machines. For many consultants real expenses sit well below 30% of income.
- Mostly B2B clients. Consultants invoice companies almost exclusively, not end consumers. That matters most for VAT and for foreign work, where everything turns on whether the customer is a business.
- Frequent work abroad. IT and business consulting is cross-border by nature. A client in Germany, Austria or the United States is not an exception but a normal situation — and it brings its own tax rules.
Those four points drive the rest of the article. Low costs decide which regime to choose. B2B and foreign work decide how to handle VAT. And a high margin means the right choice can be worth tens of thousands of crowns a year.
Flat tax versus flat-rate expenses: why the flat rate usually wins
If your costs are low, you lose by dutifully collecting receipts and deducting real expenses. What pays instead is a regime where you never touch costs and the state recognises expenses at a fixed rate. An OSVČ has three basic ways to tax income:
| Regime | How it is calculated | Who it suits |
|---|---|---|
| Real expenses | Income minus documented costs (receipts, invoices) | Anyone with substantial real costs |
| Flat-rate expenses (% of income) | Income minus a fixed percentage treated as expenses | Low costs, but you want tax credits and deductions |
| Flat tax (paušální daň) | One fixed monthly payment, no tax return | Low costs, and you want the paperwork gone |
Flat-rate expenses — 40% or 60% depending on the activity
With flat-rate expenses you deduct a fixed percentage of income without evidencing anything. Two rates matter for consultants:
- 60% — free trade. Most advisory and consulting work falls under the free trade "Poradenská a konzultační činnost, zpracování odborných studií a posudků" (consulting and advisory activity, expert studies and opinions) or "Výroba, obchod a služby neuvedené…". That covers business, marketing, IT and process consultants working on a trade licence. Expenses are capped at CZK 1,200,000, reached at income of CZK 2 million.
- 40% — independent profession without a trade licence. If you work as an independent profession under special regulations — some specialists, authorship and licensing work, court experts, interpreters — the rate is 40%, capped at CZK 800,000.
Careful: Whether you are entitled to 60% or 40% is not decided by your business card but by the nature of the activity and the authorisation you trade under. Most consultants holding a trade licence for advisory work fall under 60%. For borderline cases — authored work mixed with ordinary consulting, or business under special regulations — have the classification confirmed by a tax adviser; it feeds straight into the amount of tax.
A worked example: a consultant with income of CZK 1,000,000 using the 60% rate deducts CZK 600,000 as expenses and taxes a base of CZK 400,000 only. On top of that come the taxpayer credit and any other credits. For someone whose real costs are, say, CZK 80,000 a year, that is an excellent outcome — the flat rate recognises far more than was ever spent.
Flat tax — one payment and no return
The flat tax goes further still: instead of calculating a base, you pay one fixed amount each month that bundles income tax, social security and health insurance together. No tax return, no annual statements (přehledy) for the insurers. Three bands apply in 2026:
| Band | Monthly payment 2026 | Of which tax | Annual income up to |
|---|---|---|---|
| Band I | CZK 9,162 (final amount for the whole of 2026) | CZK 100 | CZK 1,000,000 |
| Band II | CZK 16,745 | CZK 4,963 | CZK 1,500,000 * |
| Band III | CZK 27,139 | — | CZK 2,000,000 |
* Band II applies up to CZK 1,500,000 without further conditions, and up to CZK 2,000,000 if at least 75 % of your income comes from activities with the 80 % or 60 % flat-rate expense deduction.
In band I the final monthly obligation of CZK 9,162 for 2026 breaks down into CZK 100 of income tax, CZK 5,756 of social security and CZK 3,306 of health insurance — CZK 109,944 for the year. The CZK 9,984 originally paid up to June became an overpayment once the amount was cut retroactively. You can also stay in band I with income of up to CZK 1.5 million if at least 75% of that income comes from activities carrying the 80% or 60% expense rate, which most consultants on a free trade will satisfy. Only beyond that condition, or with higher income still, do you move into band II or band III with their larger monthly payments.
The flat-tax regime is open to an OSVČ who is not a VAT payer, has annual income up to CZK 2 million, has no employment income other than income taxed at source, and is not in insolvency. The notification is due by 10 January of the year in question — for 2026, in practice by 12 January. The detail is in the separate guide to the flat tax in 2026.
Tip: For a high-margin consultant the flat tax is usually the cheapest option from roughly CZK 1.2 million up to CZK 2 million of annual income — the effective burden including insurance often lands well below the standard regime. At lower income, around CZK 0.5 to 0.8 million, the 60% flat rate with tax credits can win instead, because a fixed CZK 9,162 a month is heavy relative to a small income. Run both scenarios; the gap tends to be in the thousands to tens of thousands of crowns a year.
VAT and consulting abroad: reverse charge and the identified person
Here comes the part consultants underestimate most. As soon as you invoice advice to a company in another country, you enter the world of cross-border VAT — and that holds even if you are otherwise a complete non-payer.
Place of supply for B2B services
For services supplied to a business (a taxable person), the basic rule in § 9(1) of the VAT Act applies: the place of supply is where the customer has their seat. Consulting and advisory services fall under that basic rule. In practice, when you invoice advice to a German company, the place of supply is Germany, not Czechia. You therefore do not add the tax; the customer declares and pays it in their own country under the reverse charge. You invoice without VAT.
But that makes you an identified person
The catch is that supplying a service to a business in the EU turns even a non-payer into an identified person for VAT — with no financial threshold, from the very first such invoice. An identified person stays a non-payer towards Czech clients, still issuing domestic invoices without VAT, but has to register and deal with VAT on cross-border transactions. The same duty arises in the other direction: when you, as a non-payer, buy a foreign service (advertising, software, cloud) on which the tax is shifted to you. The mechanism and all three triggers are described in the separate guide to the identified person for VAT.
| Situation | Do you invoice with VAT? | Consequence |
|---|---|---|
| Advice to a Czech company (as a non-payer) | No | Nothing changes, you remain a non-payer |
| Advice to a company in the EU (reverse charge) | No | You become an identified person |
| Advice to a client outside the EU | No (usually outside the scope of Czech VAT) | Place of supply assessed case by case |
| Buying a foreign service (advertising, SaaS) | You declare the tax | You become an identified person and pay the tax with no deduction |
Careful: The flat tax and VAT-payer status are mutually exclusive — a VAT payer may not use the flat-tax regime. An identified person, however, is not a payer, so the flat tax and identified-person status can be combined. If you invoice abroad and are considering the flat tax, the two do not rule each other out. For transactions outside the basic rule of § 9, or for work outside the EU, the classification is worth confirming with a tax adviser.
And one more threshold that a high-margin consultant reaches sooner than expected: once turnover exceeds CZK 2,000,000 in a calendar year you become a VAT payer, from 1 January of the following year, or immediately on crossing the second threshold of CZK 2,536,500. That is also the ceiling for the flat tax, which is why turnover is worth watching continuously rather than in December.
What a consultant actually deducts when there is little to deduct
If you stay on real expenses — typically as a VAT payer, where the input deduction can make it worthwhile — the question is what belongs in costs. For a consultant the list is short but not empty:
- Equipment. Laptop, monitor, phone, headphones, accessories. The working kit you genuinely use for the business.
- Software and subscriptions. Licences, cloud tools, project and invoicing apps, development or analytics tools. For consultants this is often the largest recurring item.
- Training. Professional courses, certifications, conferences, books and subscriptions related to your advisory work. A key investment for an adviser — and deductible.
- Travel. Getting to the client, fares, travel allowances where they apply. For foreign work, flights and accommodation on business trips.
- Home office. A proportionate share of the cost of a home office and internet connection. The article on invoicing for programmers covers these expenses in more depth and overlaps heavily with consulting.
The comparison is what matters: if your real costs come out at 12% of income while the flat rate recognises 60%, real expenses leave you clearly worse off. They make sense for a consultant mainly when you are a VAT payer for some other reason and want the input deduction, or when you have an unusually expensive year because of a large investment in equipment.
Setting the price and invoicing: hourly rate or retainer
Tax is only half the equation. The other half is the price you sell at. Consultants usually choose between two models:
| Model | Advantages | Disadvantages |
|---|---|---|
| Hourly rate | Fair for intermittent work, simple to bill | Income fluctuates, capped by the hours available, penalises efficiency |
| Monthly retainer | Predictable income, room to work calmly, a better client relationship | Risk of over-delivering with no cap on hours, needs a clearly defined scope |
With an hourly rate the most common mistake is to pick the number from thin air, based on what you would like to earn per working hour. A realistic rate has to cover unpaid time as well — acquisition, administration, training — plus holidays, sickness, contributions and a reserve. How to calculate it honestly, and which number to start from, is covered in the guide on how to set the price of your work.
A retainer — a monthly fee for an agreed scope — is often the better model for more experienced consultants: it stabilises income and makes tax and contributions easier to plan. Anchor it in a contract with the scope clearly defined, so the retainer does not turn into unlimited availability. From an invoicing point of view it also has the advantage that the invoices are regular, predictable and identical in amount.
Tip: Whichever model you choose, invoice on time and in a consistent format. For a retainer with the same amount every month, set up a recurring invoice in Taxorio — on the day you anchor it to, the invoice is issued on its own and, if you want, e-mailed to the client. Recurring invoices are a PRO-plan feature and run on monthly multiples (1, 3, 6 or 12 months) for standard invoices. When the scope or the price changes from month to month, rely on item templates and issue manually instead.
Keeping records in Taxorio
A consultant does not need a full accounting system. You need to invoice, keep an eye on a handful of costs, and have the source data ready for your taxes. That is exactly what Taxorio aims at:
- Invoices without the busywork. Pull clients in from ARES by IČO and save your line items as templates. For a regular retainer an invoice is a couple of clicks.
- Costs through the AI scan. Photograph or upload a receipt or invoice and the AI extracts the amount and supplier and files it into a category. For a consultant with a few documents a month, that means record-keeping is practically done for you. The AI in Taxorio runs on the Gemini model.
- A view of income and tax. The app shows continuously how much you have invoiced and how close you are to the limits, such as the CZK 2 million turnover threshold for VAT. That keeps both the flat-tax ceiling and mandatory VAT registration in sight.
- Cross-border transactions. When you upload an invoice from a foreign supplier, the AI scan recognises the reverse charge and marks it as a service received from abroad. For an identified person and for a VAT payer, Taxorio then prepares the XML VAT return (DPHDP3) in the Financial Administration's format — XML exports are part of the PRO plan.
The recapitulative statement (souhrnné hlášení), which an identified person files for services supplied to the EU, can also be exported from Taxorio as XML (DPHSHV) — again in the PRO plan — and you then submit it yourself on the Portál MOJE daně. Invoices can be issued in crowns or in a foreign currency; foreign-currency expenses are converted at the ČNB rate.
Mistakes consultants make
- Hoarding receipts while on the 60% rate. If you use flat-rate expenses or the flat tax, you do not need your real costs — the flat rate recognises far more than you spend. Many consultants keep records they will never use.
- Missing identified-person status on the first foreign job. One invoice for advice to the EU is enough. Registration is due within 15 days of the duty arising; filing late risks a penalty.
- Charging VAT to a foreign B2B client. On advice to a company in the EU the tax shifts to the customer. Add VAT and your invoice is simply wrong.
- Choosing the flat tax without doing the maths. At low income the flat tax is relatively expensive — a final obligation of CZK 9,162 a month in band I for 2026. At a higher margin it wins comfortably. Always run both regimes on your own numbers.
- Ignoring the CZK 2 million turnover line. A high-margin consultant crosses it sooner than expected. Watch it as you go: it is the threshold for VAT registration and the ceiling for the flat tax.
- An hourly rate picked out of the air. A rate that does not cover unpaid time, contributions and a reserve loses you money over time, however good it looks at first glance.
Careful: This article is a practical guide, not a substitute for tax advice. Classifying an activity into the right expense rate (40% versus 60%), assessing the place of supply for atypical or non-European work, and choosing between regimes can all be worth tens of thousands of crowns a year at higher income. For borderline situations it pays to confirm the approach with a tax adviser.
Summary
A consultant's tax strategy rests on a single observation: you have a high margin and few costs, so deducting real expenses is usually the worst deal available. Ask instead whether you are better served by flat-rate expenses — normally 60% for a free trade, or 40% for an independent profession — combined with tax credits and deductions, or by the flat tax, one fixed payment of CZK 9,162 a month in band I for 2026, which rewards a high margin most. On VAT, remember that advice invoiced to a business abroad goes out without tax but makes you an identified person, and that CZK 2 million of turnover is the line to watch.
Add a price you have calculated honestly — hourly rate or monthly retainer — and records that do not eat your time, and you keep the maximum of that high margin. Invoices, costs and the source data for VAT all fit into Taxorio without paperwork, with a clear view of where you stand against the tax thresholds.
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.