🇨🇿 Czech Republic — Recognized Expense Rates in 2026

What are the four Czech recognized expense rates in 2026?

Rate	Applies to	Annual deduction cap
80%	Agricultural production, forestry, water management, craft trades (řemeslné živnosti)	1,600,000 CZK
60%	Other trade-licensed activities (ostatní živnosti) — IT, consulting, design, marketing	1,200,000 CZK
40%	Liberal professions not covered above — lawyers, doctors, architects, authors	800,000 CZK
30%	Rental income under the applicable rental-income rules	600,000 CZK

You do not need receipts for the costs represented by the flat rate, but you must still keep the required income, receivables, and asset records. The legal category of the income — not merely the label on a trade licence — determines the rate.

Which rate applies to most IT freelancers?

60%. If you hold a standard Czech trade licence for IT services, software development, or consulting, this is your rate — and it's the one that produces the widely-cited 13–14% effective rate for Czech freelancers.

Do the caps ever actually bind?

Yes. At the 60% rate, the deduction caps at 1,200,000 CZK — which is reached once gross income hits 2,000,000 CZK. Above that, the deduction stops growing while income keeps rising, so the effective rate climbs: for example at 3,000,000 CZK gross, it's already 21.8%.

See the full recognized expenses guide for the complete calculation and where it crosses over with paušální daň.