Czech business and tax terms decoded: what the letters actually say

The first Czech letter many foreign entrepreneurs receive is not hostile, merely dense. It mentions a DIČ, a finanční úřad, a výzva and a date, and a translation app renders all four as something faintly sinister. What follows is the vocabulary behind those letters. It is grouped by function rather than alphabet, because the logic of the system is easier to see that way.

These are descriptions of usage, not rulings. Where a figure or deadline matters, check it with the Financial Administration before you act.

How the pieces fit

Four things do most of the work. The IČO identifies you, the DIČ ties you to the tax system, the commercial register (or the trade register, for a sole trader) proves you exist, and the data box is where the state writes to you. Learn those four and most of the rest of the vocabulary hangs off them. A Czech accountant will use the Czech words without translating, so it pays to hold both versions in your head.

Identity and registration

IČO (identifikační číslo osoby) is the eight-digit number that identifies a business, sole trader or company. It goes on invoices and contracts, and it is the key you use to look anyone up in a public register.

DIČ (daňové identifikační číslo) is the tax number. For Czech companies it is usually CZ plus the IČO. Having one does not mean you are registered for VAT, which trips up a surprising number of newcomers.

Obchodní rejstřík is the commercial register, kept by the regional courts and searchable online. A company legally exists once it is entered there. The sbírka listin (collection of documents) is its public filing cabinet, where financial statements end up.

Živnostenský list is the old name for a trade licence; today you get a confirmation of your živnostenské oprávnění (trade authorisation) from the živnostenský úřad, the trade licensing office.

Datová schránka is an official electronic mailbox for dealing with the state. Companies have one by law, and since 2023 the state also sets one up automatically for sole traders; other individuals can request one. A message counts as delivered when anyone with access logs in, or on the tenth day if nobody does, even if you never opened it, so ignoring the box is not a strategy.

Company types and the people in them

An s.r.o. (společnost s ručením omezeným) is the limited liability company, the default for small and medium businesses. An a.s. (akciová společnost) is a joint-stock company. An OSVČ (osoba samostatně výdělečně činná) is a self-employed person, in practice a sole trader.

The jednatel is the managing director of an s.r.o. and the společník its member. In an a.s. the owners are akcionáři (shareholders) and the management sits in a představenstvo (board) or under a single director. Statutární orgán is the legal term for whoever can bind the company, and it matters because company-law duties attach to that role.

Tax terms

Daň z příjmů is income tax, with one regime for individuals (fyzických osob) and one for companies (právnických osob). The daňové přiznání is the return, the finanční úřad the local tax office and the Finanční správa the administration as a whole.

DPH (daň z přidané hodnoty) is VAT, and a plátce DPH is a VAT payer. An identifikovaná osoba (identified person) holds a lighter status for businesses that are not full payers but must account for VAT on certain foreign transactions. The kontrolní hlášení is the VAT control statement, a transaction-level report filed alongside the return, and the souhrnné hlášení is the EU recapitulative statement for certain sales within the Union.

Paušální režim is the flat-rate regime for small self-employed people: one fixed monthly payment in place of separate income tax and contributions. Do not confuse it with výdajový paušál, a flat-rate expense deduction that works inside the ordinary system and replaces no payment at all.

A záloha is an advance. Employers withhold zálohy na daň from salaries; the self-employed pay advances towards their insurance. Srážková daň is withholding tax, taken at source from certain payments, some dividends among them.

Accounting and records

Účetnictví is full double-entry accounting under the Accounting Act, mandatory for companies. Daňová evidence is the lighter tax record that many sole traders may keep instead. Which applies depends on legal form and sometimes on size, so ask an accountant before you assume.

The účetní závěrka is the year-end set of statements: the rozvaha (balance sheet), the výkaz zisku a ztráty (profit and loss account) and the příloha (notes). The výroční zpráva is the annual report, required of some entities and not others.

A faktura is an invoice. A daňový doklad is a tax document, which for VAT payers must carry specific details. A dobropis is a credit note.

Employment and insurance

ČSSZ (Česká správa sociálního zabezpečení) is the Czech Social Security Administration, and the OSSZ its district office. Zdravotní pojišťovna is a health insurer; the biggest is the public one, VZP. Sociální pojištění covers pensions and sickness benefit, zdravotní pojištění health care.

Mzda and plat both mean pay, the first in private business and the second in the public sector. Hrubá mzda is gross, čistá mzda net. A dohoda o provedení práce (DPP) and a dohoda o pracovní činnosti (DPČ) are agreements for casual or limited work outside a standard pracovní smlouva (employment contract), each with its own insurance rules.

Mistakes the vocabulary prevents

Three errors recur among newcomers. The first is assuming that a DIČ means you must charge VAT, or that no DIČ means you need not. VAT status is a separate question, decided by turnover and activity. The second is reading paušál as a single idea: the word appears in two unrelated regimes, and choosing the wrong one changes what you file. The third is treating the data box as optional post. Authorities regard a message as delivered after a set period whether or not you opened it, so a deadline can start running while you are on holiday.

A fourth habit is worth adding. When you forward a letter to your accountant, say which word in it worried you. The accountant will answer the question you asked rather than the one the letter implies.

Words in the letters

A výzva is a call, in practice a request from an authority to supply something by a date. A rozhodnutí is a decision and normally carries the right to appeal. Penále is a penalty on unpaid tax; pokuta is a fine.

Then there is lhůta, a time limit, which is the word to look for first in any official letter. Find the lhůta, then the sender, then what is being asked of you. Keep the Czech term next to the English one in your own notes, since every office and accountant will use the Czech, and confirm anything unclear on the English pages of the Financial Administration.

Frequently asked questions

Is a DIČ the same as being registered for VAT?

No. For Czech companies the DIČ is usually CZ plus the IČO, but VAT payer status is a separate registration that depends on turnover and activity.

Do I have to keep my records in Czech?

Accounting records must be kept in Czech, though supplementary versions in another language can sit alongside. Your accountant will confirm the detail.

Which is lighter, daňová evidence or účetnictví?

Daňová evidence is the lighter option, but it is available only to those not obliged to keep full accounts. Companies must use full accounting.

This is a general explainer, not legal or tax advice. Rules change; check the official source or a licensed adviser.