How to cancel a Czech trade licence?
Are you a Czech trade licence (živno) holder in the Czech Republic who returned to your home country? Or have you found employment and plan to stop freelance work? In these situations, it’s important that you de-activate your trade licence and inform all the relevant authorities. This will prevent any misunderstandings and unexpected debts to the health insurance and social security offices.
You can’t backdate the de-activation of your trade licence. The change takes effect from the notification date. So, if you don’t need your trade licence anymore but keep it active, you’ll continue to incur social security and health insurance fees every month. These debts can really add up. That’s why it’s so crucial that you de-activate your trade licence on time and de-register for social security and health insurance payments.
Where and how to cancel or suspend your Czech trade licence
Trade licence office
As a first step, you’ll want to visit the trade licence office (živnostenský úřad) and let them know you’re not working as a freelancer anymore. You can do this at any branch. After you notify them, you’ll receive a confirmation letter.
The office will give you two options for de-activating your živno: suspension (pausing) and cancellation.
If you’re leaving the country but think you might return sometime and need a trade license, then you should consider suspending your trade license instead of cancelling it. It’s not possible to pause your živno indefinitely. You must give a recommencement date, Czech trade license can be paused till 31.12. 2099
How to cancel or suspend Czech živno-related payments
The staff at some trade licence offices may offer to de-register you with social security and health insurance authorities. Other offices will ask you to contact these authorities yourself. If you’re in the second situation, you should follow the steps below.
Social security office
If you come in person, please bring your passport and confirmation letter from the trade licence office. If using registered mail, include a copy of the confirmation letter.
Public health insurance
If your health insurance is with VZP, then you’ll need to inform the company within 8 business days of canceling or suspending your trade licence.
You can do this by filling in this form and submitting it to a VZP office in person or by registered mail. A list of VZP branches can be found here.
If you have OZP health cover, you can inform the company by email. The email address is info@ozp.cz
If you have private health insurance, no actions are needed.
Tax office
Finally, you must inform the tax office about your changed status.
To do this, just complete this form and drop it at the PODATELNA window of your local tax office. Alternatively, you can send it in by registered mail.
Important!
Remember that you must file a tax return for the year in which you canceled or suspended your živno. Even if you only did freelance work for 2 months of the year, you still have to submit a return.
Earnings from last year should be reported this year while this year’s income should be reported by March 31 of next year. From 2023 the limit for tax applications is increased to 50 000 CZK. There’s no need to file a tax return if your gross annual income was less than 50 000 CZK but you should still apply for social and health insurance calculations.
If you are pausing your trade license, make sure your virtual business address will be always active. If your business address is canceled by service, your paused trade license also gets canceled.
Help with trade license cancellation or suspension in Prague
Whether you’ve left the country or are still in Prague and need help with de-activating your trade license and stopping related payments, PraguExpats has you covered.
We can complete the entire process for you using a special power of attorney.