Shrnutí: When we hear the term “Czech Republic’s state budget,” most of us think of billions, a deficit, and lengthy debates in the Chamber of Deputies. The Czech Republic’s national budget is proposed by the government each year and approved solely by the Chamber of Deputies. The Senate does not participate in its approval. In 2026, the state’s finances will be governed by the Act on the National Budget of the Czech Republic for 2026.
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The state budget is the government’s annual financial plan, which consolidates revenues defined by law and sets expenditures to ensure the functioning of the state. The law defines it as a set of financial documents: the State Budget Act for the given year, a breakdown of indicators, and detailed budgets for individual chapters and their amendments.
Revenues and expenditures are divided into chapters (e.g., the Ministry of Labor and Social Affairs, the Ministry of Transportation, etc.). Binding indicators (i.e., limits that chapter administrators may not exceed) are established by the State Budget Act. This also includes subsidy arrangements with regions, municipalities, and state funds. These principles are governed by budgetary rules (the Act on Budgetary Rules).
To be specific: the Act on the State Budget of the Czech Republic for 2026 sets forth the total revenues, expenditures, and deficit of the state budget and, in its annexes, details, for example, the revenues and expenditures of individual budget chapters or financial relationships with municipalities, regions, and the EU budget.
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Each year, a separate act on the state budget for the following year is enacted (for 2026, this is the Act on the State Budget of the Czech Republic for 2026). This act sets forth total revenues, expenditures, the budget balance, and the method of financing, and also includes appendices with breakdowns by budget chapter and financial relationships with regional budgets and the EU budget. It is a time-limited act —it applies only to the given fiscal year. Chapter administrators (ministries and other authorities) follow its provisions in managing their budgets.
The fundamental “law of laws” for the state budget is the Act on Budgetary Rules. It precisely defines what the state budget is, what its components are, how it is divided into chapters, how the medium-term outlook is formulated, and how binding indicators are established. The same Act also regulates budget revenues (taxes, social security contributions, fees, the Czech National Bank’s profit transfer, etc.), subsidy relationships, and procedural deadlines for drafting the budget proposal.
In addition to the budget rules themselves, the budget is also governed by the Act on Budgetary Responsibility Rules. This Act sets spending limits for the state budget and state funds and establishes the National Budget Council (the Ministry of Finance, together with the Council, must describe how it derives the spending limit, and the Council issues an opinion on this). All of this serves to ensure that public finances develop sustainably and that government debt remains under control.
Another frequently mentioned term is the Act on the Stabilization of Public Budgets. This was a broad package of amendments to dozens of regulations from 2007 that affected taxes, social security contributions, and other budgetary areas with the aim of improving the medium-term sustainability of public finances. It remains in effect today in a subsequently amended form, and some of its provisions are reflected in the current tax and budgetary environment. While it is not a law that directly “drafts” the state budget each year, it has significantly shaped the environment in which budgets are prepared.
The state budget is a plan for a given year (revenue, expenditures, financing); the state final accounts are the “final tally” of how the budget was actually managed.
It applies to a single fiscal year; after that period ends, it is carried over to the assessment in the state final accounts.
Unauthorized use or withholding of state budget funds; failure by subsidized organizations to meet their payment obligations, etc.
The Ministry of Finance spends over a year preparing the budget framework and submits a proposal to the government. After approval, the government then submits the proposal to the Chamber of Deputies. The government must submit the draft state budget bill to the Chamber of Deputies no later than three months before the start of the fiscal year, which is typically by September 30 of the previous year.
In the Chamber of Deputies, the bill is typically debated in three readings. During the first reading, the basic parameters —total revenues, expenditures, the deficit, and the method of covering it—are finalized; in subsequent readings, only internal transfers between budget chapters may be changed. The Budget Committee, which is the main committee responsible for the state budget, handles the complex technical work. However, other committees also become involved depending on their subject-matter jurisdiction.
During the second reading, amendments (typically involving these transfers) are debated; the third reading is the final vote.
Only the Chamber of Deputies can turn the state budget bill into law . The Senate does not deal with the state budget—it is not submitted to the Senate for either approval or rejection. Even when the Chamber of Deputies is dissolved, the Senate cannot replace it with a legislative measure regarding the state budget. This is important: approval of the budget is, quite simply, the responsibility of the lower house.
And what about the president? The president may veto the state budget bill (which is an ordinary law, not a constitutional one), but his veto is merely suspensive — the Chamber of Deputies may override the veto by a simple majority of all deputies—after whichthe law is enacted even without the president’s signature.
In practice, the president sometimes signs the budget bill while explaining why he did not exercise his veto. For example, in 2024, President Pavel did so with the 2025 state budget bill and noted himself that the Chamber of Deputies could override his veto.
If the state budget law is not approved and in effect by January 1, a provisional budget takes effect. Under this regime, the Ministry of Finance sets binding monthly limits, and expenditures may not exceed one-twelfth of the last approved annual budget for each month of the provisional period. Once the budget takes effect, expenditures and revenues from the provisional period become part of the approved budget. The provisional budget is therefore an emergency measure designed to keep the government running.
The government is accountable to the Chamber of Deputies for the implementation of the state budget. After the first half of the year has elapsed, it submits a report on economic developments and budget implementation. The Ministry of Finance also continuously monitors cash flow and reports to the government and the Budget Committee.
After the end of the year, the government submits a draft of the state final accounts (a summary of actual financial results) by April 30, including statements of state financial assets and liabilities, state guarantees, and the results of state funds.
The Supreme Audit Office (SAO) also plays an important role; each year, it issues an opinion on the report on budget execution for the first half of the year and an opinion on the draft final state accounts. In its opinion , the SAO evaluates how the state managed the budget, whether the data are complete and free of errors, and highlights potential risks.
A breach of budgetary discipline may include, for example, the unauthorized use or withholding of funds provided from the state budget, a state fund, or other public sources. Typically, this may involve a situation where a recipient uses a grant in a manner inconsistent with the purpose or conditions under which it was provided.
The primary consequence is usually a penalty for a breach of budgetary discipline. The amount of the penalty depends on the specific type of breach and the terms under which the funds were provided; however, the penalty cannot exceed the total amount of the grant disbursed as of the date of the breach. If the penalty is not paid on time, a late payment penalty may also be added.
We know from experience that the problem often does not arise because the grant recipient used the money for a completely different purpose. Even seemingly minor deviations from the grant conditions can be contentious, such as failure to follow the specified procedure, deadline, or method of documenting expenses. Therefore, it is always important to base your approach not only on the law but also on the specific decision or agreement regarding the provision of funds.
If a grant provider or tax authority demands a payment from you for a breach of budgetary discipline, this does not automatically mean that the amount has been determined correctly. Have the procedure and the decision reviewed by an attorney.
The state budget is a binding annual financial plan for the state, broken down into chapters with binding targets. It is based on the annual State Budget Act and the framework set forth by budgetary rules and the Act on Budgetary Responsibility.
The Ministry of Finance prepares the draft, and the government must submit it to the Chamber of Deputies. The Chamber then debates the budget in three readings (in the first reading, revenues, expenditures, and the balance are finalized). The budget is approved exclusively by the Chamber of Deputies; the Senate plays no role, and the President’s veto is merely suspensive (the Chamber of Deputies may override it by a simple majority of all deputies). If the budget is not in effect as of January 1, a provisional budget based on monthly twelfths applies. The government reports on budget implementation to the Chamber of Deputies; after one year, the final state accounts and the opinions of the Supreme Audit Office (NKÚ) are submitted. The use of funds in violation of the rules constitutes a breach of budgetary discipline and results in levies and penalties in accordance with budgetary rules.
He cannot. The Constitution does not grant him any role in the deliberations on the state budget bill and even prohibits him from adopting legislative measures concerning the state budget (even during a period when the Chamber of Deputies is dissolved).
The Supreme Audit Office—issues an opinion each year on both the semi-annual report and the draft final accounts of the state.
If the actual deficit differs from the amount specified in the approved law, the Chamber of Deputies decides on how to cover the deficit based on a proposal from the government. Any surplus is then used to reduce the national debt.
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Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 15 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
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