Each year, the Czech Financial Administration publishes a report summarizing its enforcement and inspection activities. The 2024 report highlights several areas where individual taxpayers — including freelancers (OSVČ), employees with additional income, and property owners — often make mistakes.
If you file a Czech tax return, here’s what you should know to stay compliant and avoid unexpected audits.
🔍 Common Mistakes Found During Tax Audits
In 2024, the tax authorities conducted thousands of tax audits and verification procedures (known as Postup k odstranění pochybností or POPs). These were often triggered by inconsistencies in tax returns or missing documentation. Here are some of the most frequent findings:
1. Undeclared Income
Individuals failed to report:
Business or freelance income
Rental income
Investment or foreign income
Earnings from side jobs or multiple employment relationships
Even if income is small or paid abroad, it may still be taxable in the Czech Republic and should be properly declared.
2. Incorrect Use of Tax Deductions and Allowances
Many taxpayers:
Claimed the spouse allowance without meeting the income conditions
Incorrectly deducted kindergarten fees (school fees)
Continued to claim deductions for terminated pension or life insurance contracts
Once a contract is terminated prematurely, previous deductions may need to be taxed retroactively.
3. Improper Tax Records for OSVČ
Freelancers and small business owners often failed to:
Maintain proper tax records
Prove the tax deductibility of claimed expenses
Correctly report income from multiple sources or platforms
A mismatch between what is reported and what the tax office can verify from third parties can lead to additional tax assessments.
💡 “Tax Echo” Letters: A Warning Before a Formal Audit
2024 saw the introduction of a new preventive tool called Daňové echo — a personalized letter from the tax office notifying taxpayers about potential issues in their filings.
This is not yet an audit, but a chance to correct mistakes voluntarily.
According to the report, 54% of recipients adjusted their returns, avoiding further procedures.
If you receive a “Tax Echo”, take it seriously — it may save you from penalties.
⚠️ Increased Focus on Deductions and Refunds
Tax authorities scrutinized claims for excessive VAT refunds (especially in relation to unverifiable invoices)
Audits also examined early termination of contracts (pension/life insurance) and resulting tax impacts
Over 787 million CZK in VAT refunds were withheld due to ongoing verification
🔚 Final Thoughts
Czech tax authorities are increasingly focused on behavioral indicators and cross-checking data — not just what you report, but also how consistent it is with other sources (employers, banks, pension funds, etc.).
If you:
Are self-employed with complex income streams
Claim various tax allowances or deductions
Terminate insurance or pension contracts early
Work for foreign clients or through online platforms
…it’s worth reviewing your situation with a tax advisor before filing your return.
Need help reviewing your setup or past filings?
We offer consultations and personalized tax reviews to ensure you’re on the safe side.