Filling in a tax form correctly and avoiding mistakes in your tax return is not always easy. Tax adviser Ondřej Homolka from the firm Hartmanová & Steininger answers readers’ most frequently asked questions.
1. I am employed and hold a trade licence. I claim a flat-rate allowance for business expenses. Can I claim the tax allowance for a dependent child?
If you simultaneously earn income from activities where you deduct flat-rate business expenses and from employment, you are entitled to the child allowance provided that the sum of your tax bases, taking the flat-rate deductions into account, amounts to less than half of the total tax base. Income from employment is taken into account here, including the social security and health insurance contributions paid by the employer.
2. From January to June 2014, I was studying at university. In June, I completed my studies with my final exams, and I started a job in August. If I submit my tax return myself, can I claim the student allowance in addition to the allowance for taxpayers?
You can claim the student allowance at a rate of one twelfth of the annual amount of CZK 4,020 for each calendar month in which the conditions for entitlement to the tax reduction were met at the start of the month. If you completed your studies in June when you took the final state exam, you can only claim half of the total annual allowance.
3. I am currently on parental leave with my younger child, so my older child does not attend nursery. However, for the sake of social interaction, my son attends nursery clubs three times a week, which we pay for. Can I claim these payments under the nursery allowance?
The newly introduced deduction – the nursery deduction – is granted for the attendance of a child in a facility providing care for pre-school children. This includes any facility that offers childcare for pre-school children. I assume that these conditions are not met in your case.
4. Do I need to file a tax return if I am at home with my child and my only income is parental allowance?
Parental allowance is a state social benefit that is exempt from income tax. If you had no other income last year, you do not need to submit a tax return. If you have previously filed a tax return, it is advisable to inform the tax office in writing that you had no taxable income for 2014, in order to avoid a possible request to submit a tax return.
5. Is it possible to request a statement from the tax office so that I know which tax returns and data are on file for each year?
The tax offices do not provide this type of statement. If the tax office had assessed your tax differently in previous years to how you declared it yourself, you would have received a tax assessment notice and been informed of this. Should you have any doubts for any reason, you can request access to your tax file from the tax office. This is maintained for taxpayers who file their own tax returns, but not for employees whose income tax is deducted directly by their employer.
6. I am considering moving abroad but will retain my residence in the Czech Republic. If I have no income here, do I still need to file a tax return?
You would be exempt from this obligation if you are no longer a tax resident in the Czech Republic but in another country, and you do not receive any income from the Czech Republic. The residence of a natural person is determined on the basis of the provisions of the tax laws of the respective countries and the double taxation agreements concluded between them. The first criterion is a permanent residence, i.e., a place you can use for long-term living. If you have a permanent residence in two or more countries, the next criterion is in which country you maintain closer personal and professional ties. If the country still cannot be clearly determined on this basis, tax residence is determined based on the length of stay in each country.
7. My wife is on parental leave and has a valid employment contract with her employer. Who is responsible for filing the tax return? If the employer is responsible, do they need to have my wife sign the tax return?
Employees who have no income other than that from their employment do not need to submit a tax return. The employer prepares what is known as the annual statement for them, which does not require the employee’s signature. In order for the employer to carry out the annual statement of advance payments, the employee must request this from the employer by 15 February of the following year at the latest. This applies to the year in which your wife took parental leave and subsequently received parental allowance. If she received the parental allowance for the entire year and had no income from her employment, an annual statement is not even required.