If you’re considering pausing or canceling your Czech trade license, the end of the year is the ideal time to take action. This is especially crucial if your trade license is active for even a single day in the following year, as you’ll be required to file taxes for that year. Find more tips about canceling or pausing your Czech trade license below!
Pausing vs. Canceling the Trade License: What’s Best for You?
When deciding whether to pause or cancel your Czech trade license, consider how soon you might need it again. Canceling requires you to go through the entire application process again if you decide to resume business activities (including getting a new criminal check, new business address, new admin fee etc.), while pausing allows for a smoother reactivation process (basically just two simple visits to the trade license office).
If you decide to just pause your trade license, you can do it either for a specified period of time (i.e. 3 months, 2 years and 7 months, 10 years) or for “unlimited” period of time (basically until the same day of 2099). If you just pause your trade license (instead of canceling it), it will automatically reactivate itself after the given period of time. So, pausing the trade license for a specific period of time makes sense primarily if you are certain that you will need the trade license again after that period of time (i.e. you do not teach during summer but start again in September).
If you’re certain you won’t need the license again, canceling may be the better option.
The above applies a bit differently to third country nationals who are in the Czech Republic under long-term visas or long-term residence permits. In these cases, the trade license usually has the same validity as your visa or residence permit.
If you are not sure which option to choose, get in touch with us and we’ll be happy to advise 🙂
Financial Implications of Pausing or Canceling your Czech Trade License
Pausing or canceling your trade license will stop your obligations to pay your monthly social security and healthcare deposits. However, this also means that you will no longer be covered by these services, so it’s important to plan accordingly. The social security probably does not matter much since it generally does not bring any short-term benefits.
The health care might be a bit more of a problem since canceling or pausing your trade license means you will no longer be covered by the Czech public health care system. That means if you need to get some medication or undergo some treatment, it might be best to wait with canceling or pausing your trade license after dealing with this.
You can also buy a private insurance instead though 🙂
Impact on Your Residence Permit
For those with a business visa or a business residence permit, be cautious—pausing or canceling your trade license could result in the loss of your visa or residence permit. The reason for that being “not fulfilling the purpose of your stay”. Simply said, you hold a visa/residence permit based on running a business, but you do not run a business since your trade license is paused or canceled.
This could result in the MOI questioning the purpose of your stay and thinking you only got the visa to be legal in CZE or the EU with no real intention to really run any business. And this is a serious breach of the immigration policy which can result in canceling your visa or residence permit.
As almost everything in Czech immigration, also this is a bit complex topic. For example, if you only pause your trade license for two months when you’re gone for holidays, that might not affect your status at all. At the same time, you might get into trouble having high enough monthly income average (which is important for your extensions).
If you are thinking about make any changes with your trade license, get in touch and we’ll be happy to discuss the best approach for you 🙂
If your trade license is not tied to your residence permit, such as for EU citizens or those with other types of visas (i.e. student or family reunification not using the business income for extensions), you can pause or cancel it without affecting your residency status.
How We Can Help
At Move to Prague, we simplify the entire process for you. From handling paperwork to ensuring you receive all the necessary confirmations (and information if you owe the authorities anything or not), we make pausing or canceling your trade license as stress-free as possible. While online options are available (though your data box will be canceled with your trade license), visiting each authority in person—such as social security, income tax, and healthcare—is highly recommended to ensure all calculations are accurate and that there are no outstanding debts.
What to Remember after You Cancel or Pause Your Trade License
In 12 years working with clients, we have seen this happen plenty of times – people forgetting to submit their tax returns and social security and healthcare reports.
Even though your trade license is already paused or canceled, as long as it was active for at least one day of the given year, your are still obliged to submit a tax return and social and health care reports to the Czech authorities. For example, if you cancel your trade license in Feb 2025, you still have to submit those in 2026.
This might be clear when you are dealing with the cancelation/pausing. If the reason for the cancelation or the pause is that you are leaving the Czech Republic, it might be easy to forget about this obligation in a year. The best approach is to get in touch with your accountant (if you do not have any, let us know and we’ll share details of the one we work with) when canceling or pausing the trade license and to prepare all the reports right away. The accountant can also submit everything on your behalf next year.
Take Action Now
Avoid unnecessary complications by aligning your trade license status with your future plans. If you need assistance, we’re here to help make the process as smooth as possible. Shoot us a message or give us a call 🙂!
