Tax law and financial law
Framework
Act No. 280/2009 Sb. (daňový řád) governs tax administration; Act No. 586/1992 Sb. governs income tax; Act No. 235/2004 Sb. governs VAT. Financial law also covers the state budget, banking, currency and financial supervision. The exam tests tax liability, assessment, payment, penalties and the basic financial framework.
Tax administration
A tax is defined by subject, object, base, rate and due date. Taxpayers file a return (self-assessment) or the authority assesses the tax. The authority may conduct a tax inspection, issue a payment assessment (platební výměr) and impose penalties for late filing or payment. The taxpayer may appeal (odvolání) within 30 days, seek review and apply for remission. Enforcement follows the Tax Code.
Income tax and VAT
Income tax applies to individuals and legal persons; residents are taxed on worldwide income, non-residents on Czech-source income. Expenses may be deducted if statutory conditions are met. VAT is a general consumption tax; the standard rate is 21%, with a reduced rate for specified goods and services. Input tax is deductible if the taxpayer is registered, the transaction is taxable and the invoice meets formal requirements.
Financial law
The state budget is adopted by Parliament; budgetary rules are in Act No. 218/2000 Sb. The Czech National Bank (ČNB) is the central bank and supervises the financial market. Banking, insurance and capital markets are regulated by separate statutes.
Worked example
A company deducts VAT on an invoice from a supplier that later turns out to be a “missing trader”. The deduction is denied if the company knew or should have known of the fraud; mere formal compliance is not enough. The burden is on the tax authority to prove the facts, but the company must show its own due diligence. The analysis separates formal invoice requirements from substantive abuse.
Traps
Missing the 30-day appeal period; confusing self-assessment with official assessment; forgetting that VAT deduction requires substantive conditions; and treating the Tax Code as identical to the Civil Procedure Code.