Lesson 4

Practical Example of Calculation of Tax Liability of Individuals

The taxpayer is Mr. Novotný who provides following information about his income receiving
during 2023:
 Confirmation of taxable income from employer ABC Ltd of 252 000 CZK (full-time work
contract from 1/2023 until 9/2023). Received tax bonus 13 473 CZK.
 Confirmation of taxable income from employer CBA Ltd of 100 000 CZK (full-time work
contract from 10/2023 until 11/2023). Advance payment for tax liability 4 592 CZK.
 In 12/2023 Mr. Novotný started his own business. Therefore, he has income under sec. 7
(Business and Professional Income). His taxable income is 50 000 CZK. The sum of
allowed expenses is 32 000 CZK. His business activities belong under other activities for
which a trade license is issued.
 Mr. Novotný owns a flat in Brno. However, he lives with his wife and 2 children in Prague.
Therefore, he decided to rent this flat to university students. The rental contract is valid
for 12 months (all calendar year). The monthly rent is 10 000 CZK for all flat. Mr. Novotný
does not provide you any information about expenses.
 Additional information about Mr. Novotný:
o He has a wife who has own taxable incomes higher than 68 000 CZK.
o He has 2 children who are attending primary school.
o During 2023 he paid 18 000 CZK for private life insurance.

Task: Calculate the total tax liability of Mr. Novotný in 2023.