Not an Entrepreneur and Not Filing a Tax Return? This Could Be a Mistake

Even if you’re not an entrepreneur and aren’t legally required to file a tax return, it might still be beneficial to do so in certain situations. By filing a return with the tax office, you may be able to reclaim all the advance payments you’ve made. This typically applies to taxpayers who had taxable income for only part of the year, didn’t file an annual return, and didn’t work for the full 12 months. These individuals paid taxes in advance but didn’t fully utilize the basic taxpayer discount or other tax benefits.

Filing a tax return can be advantageous for those who worked part of the year in 2024 and were unemployed for the remainder. These taxpayers often didn’t fully use the basic tax relief (CZK 30,840 per year), resulting in paying more advance tax than necessary. By submitting a tax return, they can claim the full deduction. However, a taxable income verification form must be attached to the return.

Example

Mr. Novak worked until the end of September 2024 and spent the remaining three months at the job center. His gross salary was CZK 44,900, and his taxable income certificate shows a taxable income of CZK 404,100. He paid CZK 37,485 in advance taxes.

With a tax base of CZK 404,100, the tax before the discount is CZK 60,615. After applying the discount of CZK 30,840, his tax liability is CZK 29,775. However, Mr. Novak has already paid CZK 37,485 in advance payments. If he files a tax return, the tax office will refund him the difference, which is CZK 7,710.

Who Else Should File a Tax Return?

Similar to the unemployed, other groups of people should also consider filing a tax return. For instance, students who earned money from part-time jobs and didn’t file an annual tax return fall into this category. These students typically signed a declaration with their employer stating that they are responsible for paying personal income tax on their earnings and benefits. However, it’s important to note that in 2024, they can no longer claim the student tax bonus; they can only claim the basic taxpayer discount in their return.

Another group that should file a return includes taxpayers who were on sick leave for part of the year. By doing so, they can claim all unused benefits. The same applies to mothers who worked for part of the year before going on maternity leave. For example, if a woman went on maternity leave in June, she didn’t claim the taxpayer’s benefit for the period from July to December. She can recover this by filing a return. Additionally, if a woman returns from maternity leave and her employer doesn’t find work for her, leading to formal dismissal with severance pay, it’s still worth filing a return. This is because tax is paid on severance pay.

Who Must File a Tax Return?

According to § 38g of the Income Tax Act, anyone whose annual income subject to personal income tax exceeds CZK 50,000 must file a tax return for 2024, unless this income is exempt or taxed at a special rate.

Tax returns are also required from taxpayers who declare tax losses, regardless of their income amount. Additionally, non-resident taxpayers must file a return if they claim a tax refund under section 35ba(1)(b)-(e) or a tax credit or non-taxable portion of the tax base.

If a taxpayer has been notified by the tax authority about the amount of tax due or an overpaid tax credit due to their fault, and they have provided the necessary documents to recover the difference under section 38i(5)(b), they are also obligated to file a tax return.

Other groups of taxpayers are also required to submit a return.

Submitting a Declaration Electronically

When submitting a declaration, it’s important to note the situations in which a paper declaration is allowed and when it is not. This is particularly relevant for those who have an electronic data box installed by law. Since most private entrepreneurs have had these data boxes for several years, they are required to submit their declarations online. Consequently, most self-employed individuals must submit their declarations electronically by May 2, 2025.

The primary deadline for filing a tax return is otherwise Tuesday, April 1. However, for those who submit their declarations electronically, the deadline is extended by one month. Therefore, electronic declarations can be submitted until May 2, which also extends the deadline for paying any additional taxes to May 2.

P.S. If you need assistance with taxes and accounting in the Czech Republic, our experts at 360WEDO are here to help. Leave a request on our website, and we will get back to you.

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