Working for yourself, or freelancing, is mainly about work freedom. In TITANS, we can easily connect IT specialists with interesting projects. But before we get into that, it is necessary to become a freelancer.
A freelancer can choose where and when they work, on what projects and how much they earn. Especially in the world of IT, this type of work is popular with professionals as well as companies seeking the best professionals for their projects.
I’m done, Boss
When you are leaving employment to start earning as a freelancer, i.e an own-account worker, it is necessary to request the following documents which will be needed for tax declaration.
Proof of taxable income (for tax declaration purposes)
Pension insurance record sheet (ELDP) (for pension purposes),
Record of employment (this document is only received if the employment relationship gave rise to participation in sickness insurance or deductions from the employee’s wages).
Getting a VAT identification number
Our next steps on the way to freelancing lead to the Trade Licensing Office where you must get a trade licence for a free trade. To set up a free trade licence, it is necessary to fill in the Universal Registration Form which will take half an hour at most.
It is a good idea to come to a Trade Licensing Office with a filled-in form (this is not obligatory, the employees at the office will always help with filling in the form),
This service costs CZK1000 and you can pay for at the filing room in case of an in-person registration, by a bank transfer or a money order.
TITANS TIP: It is always better to tick as many activities related to your future trade as possible. Each additional amendment of the trade license will incur a CZK 500 administration fee.
What to bring to the Trade Licencing Office
Documents necessary for setting up a free trade:
Filled-in registration form
An employee at the relevant Trade Licensing Office will do this on a computer – they will prepare the form for signing, no need to bring a printed copy.
An ID card
A receipt of payment of the administrative fee (any document confirming payment)
TITANS TIP: You can choose any Trade Licensing Office to register. There is no need to register at your local branch or that of the place you will work from.
Declaring a trade
The filling in and delivery of the registration form, delivery of all the documents and the payment of the administrative fee is called “declaring a free trade”. The whole process you can complete in several ways:
Through an online form – in case of filling in the Universal Registration Form digitally
Only if:
You have a digital signature – by submitting to the electronic filing room,
You have an electronic data box – by submitting to the data box of the Trade Licensing Office
In person at the nearest Trade Licensing Office (alternatively at a CZECH Point branch),
By post (preferably as registered mail): by filling in and printing the PDF form.
Insurance, taxes and another insurance
Once a person becomes a free trader, they take care of themselves. Mainly as regards the things hitherto dealt with by the employer – insurance and taxes. It is necessary to register to pay your own health and social security insurance and to pay income tax.
This you can do when filling in the Universal Registration Form. In case of an in-person registration, it is necessary to notify your assigned employee about this:
You will need to have your insurance card with you. After you register your trade, you will have 15 days to register to pay your income tax.
In case of an in-person registration, this will also do the Trade Licensing Office employee.
A statement of an entry in the Trade Register is a summary of data about the relevant trader contained in the Trade Register and basic identification data. You can request a partial or a complete statement.
It usually takes 1-10 days to get.
The requestor usually leaves the Trade Licensing Office with an assigned tax identification number (ID).
Attention: After the registration, you may receive a letter from the Trade Register requesting you to pay a listing fee – do not pay this fee as the listing in the register is automatic and free of charge.
After the registration
And that’s it! Most of the paperwork is done but you will still need to make all the recurring payments…
We recommend setting up a standing order to make your health and social security insurance payments.
The amount you pay will depend on whether your trade is your main source of income (you are not in a concurrent employment), or a side hustle (you are in a concurrent employment):
Social security insurance payments are made under a variable symbol assigned by the Czech Social Security Administration (CSSZ). Health Insurance payments are made under a variable symbol identical to your National identification number (without the virgule)
Another option is to register for a flat tax.
Setting up a trade might look like a difficult process but ultimately requires just one visit to the Trade Licensing Office and possibly to an insurance company. You can become a freelancer in a day. After that, you can choose from the list of current IT projects. And if anything goes wrong, just let us know and we will gladly help you.
