Shrnutí: In 2026, tax records may be maintained primarily by self-employed individuals who are not accounting entities and do not claim expenses on a flat-rate basis. The records must include not only actual income received and expenses paid, but also assets and liabilities. The law does not prescribe a specific form—what matters is that the data be verifiable, properly categorized, and supported by supporting documents.
Tax records are used by self-employed individuals to determine their income tax base. They must include information on income and expenses, assets, and liabilities. A self-employed person may maintain these records in a spreadsheet, accounting software, or on paper, provided that the entries are verifiable and supported by documentation.
Not sure whether you can keep tax records or if you’re already required to maintain accounting records? Our specialists will assess your situation and help you establish the correct procedure so that, in the event of a tax audit, you won’t have to go through the hassle of proving how you arrived at each amount.
Tax records are records kept for the purpose of determining the tax base and income tax and must include data on income and expenses (broken down in such a way that the tax base can be determined from them), as well as data on assets and liabilities.
In practice, this means that you continuously record how much money you actually received, how much you actually paid, what you own for business purposes (typically equipment, a car, a computer), and what your receivables and payables are—that is, who owes you money and whom you owe money to. The goal is for you to be able to explain how you arrived at your tax base (and for your supporting documents to corroborate this).
Tax records, therefore, are not just a list of income and expenses. It’s equally important that you also keep track of your assets and liabilities. Why? Because assets often cannot be fully expensed immediately (typically, fixed assets are expensed gradually), and tracking debts and receivables helps you monitor whether someone has failed to pay you or, conversely, whether you’ve forgotten to pay something.
There is no official form for maintaining tax records. The law specifies what the records must contain, but it does not require you to keep them on a specific form. Therefore, you can maintain your tax records in an Excel spreadsheet, on paper, or using one of the many tax record-keeping programs available.
It’s also good to keep one more thing in mind: while tax records are a tax tool, they actually help you in your business as well. If you keep them up to date, you’ll have an immediate overview of whether your business is profitable, which expenses are rising, who hasn’t paid you, and where your money is going. And if you manage them wisely, when it’s time to file your income tax return, all you’ll have to do is pull up the summaries—instead of spending March or April retroactively hunting down payments and receipts in your emails and in a shoebox.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
There’s a simple rule: you can keep tax records as long as you aren’t required to maintain accounting records (i.e., as long as you aren’t a so-called “accounting entity”). Once you become an accounting entity, tax records are no longer sufficient as your primary record-keeping system—the law requires you to maintain accounting records in accordance with all applicable rules and to produce the required financial statements.
When does a self-employed person become an accounting entity? Most often, this happens when you, as an entrepreneur, are registered in the Commercial Register (regardless of whether the registration is mandatory or voluntary—the registration itself is what matters). The second typical situation is when your business grows and your revenue, as defined by the Accounting Act, exceeds 25,000,000 CZK for the immediately preceding calendar year. Finally, you can also become an accounting entity by voluntarily opting to keep accounting records.
In practice, this means the following: if you are a “typical” self-employed individual (such as a craftsman, consultant, or graphic designer), you are not registered in the Commercial Register, and your revenue has not exceeded the specified limit, then tax records are usually the standard and often the simplest way for you to fulfill your tax obligations and keep track of your income, expenses, assets, and liabilities.
Read more about the differences between tax records and accounting.
Tax records are not something you keep for your own purposes, but rather records used to determine the tax base and income tax. The Income Tax Act therefore stipulates that tax records must include information on income and expenses (broken down in such a way that the tax base can be reliably determined) as well as information on assets and liabilities.
In practice, this means that it is not enough to simply have a single line at the end of the year stating “income: 800,000 CZK, expenses: 320,000 CZK.” The law requires that you record income and expenses in a way that allows them to be traced back to supporting documents, making it clear what is included in the tax base and what is not.
It’s also important to distinguish between taxable and non-taxable items. A typical example: when you transfer money from your business to your personal account, it’s a bank transaction, but it’s not a tax-deductible expense. Conversely, a payment for materials used in a job is typically a tax-deductible expense. Well-maintained tax records force you to distinguish between these items on an ongoing basis—and in doing so, you protect your tax base from unnecessary errors.
From practice: Business owners often confuse a bank account transaction with tax income or an expense. Typical examples include a personal deposit, a loan drawdown, or a personal withdrawal. While the money passes through the accounting system, it does not, in and of itself, increase or decrease your tax base. During an audit, it is therefore important to be able to document not only the amount but also the reason for each transaction.
The second mandatory section covers assets. It sounds simple (“I have a laptop, a car, tools”), but it is legally important because some assets are recognized as tax deductions gradually (typically through depreciation), while others are recognized immediately. The law also specifies that, unless the Income Tax Act provides otherwise, the rules set forth in accounting regulations apply to the definition of asset categories—in other words, this is not merely a list of items, but a coherent and logical overview.
In practical terms, think of asset tracking primarily as knowing when and for how much you acquired each asset, what it is used for, and how it is treated for tax purposes (as a one-time expense or gradually). Without this, it’s very easy to claim the same expense incorrectly—and that’s exactly the kind of thing the tax authorities will focus on during an audit.
Find out when you can claim a tax deduction for your car.
The third required section covers liabilities and receivables. A receivable means that someone owes you money (for example, you issued an invoice and haven’t received payment yet). A liability means that you owe money to someone else (for example, you received an invoice for materials and haven’t paid it yet).
In addition to the Income Tax Act, the Tax Code is crucial in practice. It uses the term “record-keeping obligation” —and states very clearly that you must retain the records, files, and documents covered by this obligation until the tax assessment period expires.
What is the “tax assessment period”? The basic rule of the Tax Code is that tax cannot be assessed after three years have elapsed. This period typically begins when the deadline for filing a regular tax return (typically an income tax return) has passed. At the same time, however, this period may be extended in various situations—which is why, in practice, it makes sense to keep documents for longer than just three years after filing.
The tax authority may audit whether your records reflect reality —that is, whether your entries, documents, and actual cash flows are consistent with one another. If they find discrepancies and you cannot explain or substantiate them, you have a problem. The Tax Code expressly allows the tax authority, in a situation where tax cannot be assessed based on evidence due to a failure to fulfill obligations, to assess the tax using auxiliary evidence.
“Estimates” refer to a qualified assessment based on what the tax authority has at its disposal or what it obtains —for example, comparisons with similar businesses, available accounting data, information from business partners, and so on. The key point is that under this regime, you no longer have full control over the situation: if your records and documents are not conclusive, the tax authority has much greater leeway to make estimates, and the result may be a higher additional tax assessment than if your records had been in order.
Has the tax authority requested that you provide your records, or has it already initiated an audit? Don’t wait for the tax authority to assess your income and expenses without your explanation. We’ll help you respond to the request and defend your approach before the tax authority.
Once you become a VAT payer, you are also required to maintain records for VAT purposes and be able to use them to prepare your VAT return (and other related filings).
The VAT Act requires taxpayers (and, in certain situations, identified persons) to maintain records for VAT purposes and specifies what information must be included—including links to received supplies for which you claim a deduction, as well as records of business assets for VAT purposes.
And be sure to follow archiving rules: you must retain VAT tax documents for 10 years from the end of the tax period in which the transaction took place; the law also addresses the electronic storage and accessibility of these documents.
There are several options for keeping tax records—and the good news is that the law does not require you to use a specific form, but mainly that you have the necessary data recorded and can provide proof of it.
Keeping tax records in a physical notebook or an Excel spreadsheet is therefore the most common way to start. It’s simple, inexpensive, and perfectly sufficient for dozens of entries per month. To ensure your records are verifiable during an audit, it’s worth setting up a simple system: record each payment immediately (payment date, amount, description) and note the document number next to the entry. File your documents in the same order or at least label them clearly.
For a larger volume of receipts and more complex administrative tasks, a specialized tax accounting program is worth considering. The advantage of such software is that it prompts you to fill in the required fields, links payments to receipts, and generates reports for tax purposes ( including VAT for taxpayers).
If you’re just starting out, or if VAT, assets, and liabilities are starting to get mixed up in your records and you’re not sure what goes where, it makes sense to invest in a tax record-keeping course. Good courses focus primarily on practical application: what a tax record should include, how to track assets and liabilities, how to record income and expenses, and how to prepare financial statements. And if you use specific software, the course will usually offer free training on that software.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
In practice, the best way to understand the principles of tax records is through specific situations you deal with every month: you issue an invoice, receive a payment, pay expenses, and occasionally contribute your own money to the business or, conversely, withdraw money from it. So let’s look at the two most common scenarios: tax record-keeping for non-VAT payers and VAT payers.
Imagine you’re a self-employed graphic designer— you’re not a VAT payer and you keep your tax records in a simple spreadsheet. In September, you’ll encounter several common situations, and we’ll record them in a way that makes sense even a year later when you’re preparing your tax return.
On September 2, you issue an invoice to a client for a visual identity design in the amount of 18,000 CZK, due in 14 days. It’s important to note that you don’t record any income in your cash journal yet, because you haven’t received any payment. For tax purposes, the date of payment is typically what matters—that is, the moment the money actually comes in or goes out—not the invoice date or the due date. However, to keep things organized, you can note the invoice in a simple receivables summary (who owes you and how much).
On September 12, the client pays you 18,000 CZK via bank transfer. Only now is the income recorded in the cash journal. In the table, create a new row and enter the date September 12, the document number (for example, “F2025-009”), the description (“Graphic design work – invoice payment”), the amount of 18,000 CZK, and mark it as taxable income. “Taxable” in everyday language means that this is an amount that is typically included in the income tax base (as opposed to transactions that did take place but are not considered income for tax purposes, such as a deposit of your own money).
On September 15, you pay 1,200 Kč by card for graphics software. Record the expense in your records with the date September 15, the document (invoice/receipt), a description (“Software – license”), and the amount of 1,200 Kč as a tax-deductible expense. “Tax-deductible expense” means an expense incurred to generate, secure, or maintain your income—in practice, this must be a business-related expense, and you must be able to document it with a receipt.
On September 20, you send 600 Kč by mail to cover the cost of printing and mailing samples to a client. Again, record the expense on the payment date (September 20), attach the supporting document (postal receipt/receipt/invoice), and mark the 600 Kč as a tax-deductible expense (“Postage – sending samples”). A common mistake here is that people have the receipt somewhere in their email, but it’s not clear in the spreadsheet what it’s for—so stick to this simple rule for every entry: every journal entry must have a traceable receipt (paper or PDF).
And now comes the situation that causes the most confusion: on September 22, you transfer 5,000 Kč from your personal account to your business account because you need to cover expenses (or a client won’t pay you until next month). The money arrived in your business account—but it’s not taxable income. It’s a deposit. You didn’t earn this money through your business, so you don’t include it in your taxable income. Therefore, you record it in your books as non-taxable income (typically labeled “Business Owner’s Deposit”).
The same logic applies to a loan: if a bank transfers a loan to your account, the money arrives, but the loan isn’t income —it simply creates a debt (liability) for you. So, again, it does not belong in your records as taxable income. It makes sense to record it as non-taxable income and, at the same time, note the liability (debt).
And finally, a reminder that many self-employed individuals only realize during their first audit: if something isn’t in your records and you can’t back it up with supporting documents, it’s as if it never existed. The Tax Code establishes a record-keeping obligation and stipulates that you must retain records and supporting documents until the deadline for tax assessment has passed—which is why it pays to organize your documents systematically (whether in a binder or in a digital folder organized by month).
Imagine you’re a VAT payer and you issue an invoice: 10,000 CZK + 21% VAT (2,100 CZK). The customer pays you 12,100 CZK.
In your cash journal, you want to achieve two things at once: to ensure the bank statement matches (CZK 12,100 received) and to ensure that the correct amount appears for income tax purposes (typically the base amount of CZK 10,000, not including VAT). In practice, this is handled by having columns in your spreadsheet or program labeled “income (base)” and “output VAT,” which together equal the amount that was deposited into the account.
Specifically, you enter the revenue on the payment date and split it: 10,000 CZK into “taxable revenue” (for income tax) and 2,100 CZK into “output VAT” (for VAT reporting). This ensures that your tax base does not increase by the amount of VAT, which you are effectively just collecting on behalf of the government.
Then you purchase materials for 3,000 CZK + 630 CZK in VAT, and you’re entitled to a deduction. From an income tax perspective, you’ll typically claim 3,000 CZK (the base amount) as an expense, while the 630 CZK won’t go toward tax-deductible expenses but rather toward the VAT credit (input VAT). Again: in your records or column layout, you’ll do this by splitting the expense into “expense (base)” and “input VAT”; together, these will equal the amount paid.
Keep in mind that the date of the taxable supply is decisive for VAT liability , and this date may differ from the date on the invoice.
For income tax, the so-called tax assessment period is key. The Tax Code stipulates that tax cannot be assessed after three years have elapsed and also describes when this period begins (typically upon the expiration of the deadline for filing a regular tax return). But that’s not all—the law also specifies situations in which the period is extended (for example, by one year if certain actions are taken in the 12 months prior to its expiration) or when it may start running again (for example, upon the initiation of a tax audit). Therefore, it’s best to treat the 3-year period as a minimum, not as a guarantee after which you can discard everything.
The rule is stricter for VAT. The VAT Act states that tax documents must be retained for 10 years from the end of the tax period in which the transaction took place. This applies not only to standard invoices but generally to all tax documents for VAT purposes. Furthermore, the law stipulates that a record-keeper with a registered office or place of business in the Czech Republic must store documents within the Czech Republic, unless they are stored in a manner that allows for continuous remote access; and it also expressly permits electronic storage (including conversion from paper to electronic form and vice versa), provided that the authenticity of origin and the integrity of the content are preserved.
Tax records are ongoing records used to determine the income tax base: it is not enough to simply record income and expenses; you must also include an overview of assets and liabilities (receivables and payables) so that you can document how you calculated your tax base and how supporting documents relate to it. Typically, a “regular” self-employed individual who is not an accounting entity can maintain these records—once you are registered in the Commercial Register, exceed a turnover of 25 million CZK for the previous year, or voluntarily opt for accounting, tax records alone are no longer sufficient. The law does not specify a single form, so you can keep these records in Excel, on paper, or using software—what matters is the classification of items (taxable vs. non-taxable), consistency with supporting documents, and verifiability.
In practice, the date of payment (when the money actually came in or went out) is decisive, not the date the invoice was issued; an entrepreneur’s deposits or loans are not considered taxable income, only bank transactions and, where applicable, liabilities. You must retain supporting documents to comply with record-keeping requirements at least until the tax assessment period expires (generally 3 years, though often longer in practice), because in the event of discrepancies, the tax authority may assess the tax “based on available evidence.” For VAT payers, this is supplemented by VAT record-keeping obligations (separating the tax base and VAT for both income and expenses, linking to input tax credits, and tracking business assets for VAT purposes), as well as stricter archiving requirements for VAT documents for a period of 10 years from the end of the tax period in which the transaction took place.
No, in that case, you typically do not keep full tax records. However, you are still required to keep records of your income and accounts receivable (so that you can demonstrate how you calculated your tax base).
In general, you can also archive documents electronically, provided you can verify their authenticity and legibility.
Try to obtain a duplicate copy (from the supplier, online store, or service provider), locate the payment confirmation, and create an internal record detailing what happened and how you determined the amount. The more documents you can replace with supporting evidence, the lower the risk.
You need to have a consistent rule for converting amounts to CZK (bank exchange rate or CNB exchange rate, depending on the situation) and be able to document it. In practice, it is essential that you save a supporting document for each payment that shows the exchange rate used (statement, PDF, confirmation).
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
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.
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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