If you have occasional income of up to CZK 50,000 per year, the law states that:
- you don't need to have a trade license
- You do not have to report this income on your tax return.
- you don't have to pay income tax on it
However, this only applies if both conditions are met at the same time.
Where mistakes often occur
A common misconception is that any income up to CZK 50,000 is automatically considered occasional.
This is not true.
The law stipulates two conditions:
- it must be occasional income
- the total amount may not exceed CZK 50,000 per year
It is not enough to fulfill only one of them.
What is (and isn't) incidental income
Occasional income is considered to be something that is:
- short-term
- exceptional
- unsystematic
A typical example is a one-time sale of apples from the garden or a random side job.
However, if you have affiliate links, advertising space on your website, or receive commissions on a regular monthly basis, this constitutes an activity:
- systematic
- repeated
- long-term
Such income can no longer be considered occasional.
Recommendations from practice
For these reasons, we strongly recommend:
- have a trade license for advertising activities
- have commissions paid by invoice
- pay income tax properly
If you insist that this is occasional income, we can pay you commission without an invoice —based on a written request for payment.
At the same time, however, we would like to point out that, according to the law, you should pay tax on your income. Any further responsibility is then up to you and any resolution with the tax office.
On a larger scale, this could also constitute unauthorized business activity.
Exceeding the limit of CZK 50,000
If you exceed the limit of CZK 50,000 per calendar year, you must:
- tax the entire income retroactively, not just the portion above the limit
Legal basis
You can find details in the Income Tax Act:
- Section 10(1a)
- Section 10(3)
If you are unsure which mode is right for you, you can use the public discussion forum or write to us directly at: affiliate@wedos.com.