What does the trade licensing office check? 

Simply whether all the information you have registered with it is correct. Individual trades are often inspected – whether you have registered every activity you carry out. Another common check is whether your registered business premises are up to date and properly labelled.

Who carries out the inspection, and where?

Your local trade licensing office initiates the inspection through an authorised officer – the inspector. They can conduct it at the office itself or on site (for example, at your business premises). 

Why has the trade licensing office chosen to inspect you?

It may be a routine inspection – your turn simply comes around every few years. In practice, though, most inspections I have encountered were prompted by a complaint. All it takes is an unhappy customer requesting an inspection, and the trade licensing office will come to check your business. 

How do I find out that a trade licensing inspection has started?

Your trade licensing office will usually notify you in advance. Your data box will receive a notice of the inspection with the necessary information (who the inspector is, when and where the inspection will take place, what you must present, etc.).

The trade licensing office can also carry out an unannounced inspection at your business premises. These spot checks aim to establish whether you really comply with all your obligations. 

What should I prepare for the inspection?

Make sure you do not leave your ID card at home. All documents the inspector wishes to see are listed in the inspection notice. They may include

  • received and issued invoices, cash documents and contracts
  • tax returns, including proof of submission from your data box
  • self-employed statements submitted to the District Social Security Administration (OSSZ)
  • if you operate with a responsible representative, documents demonstrating that representative’s involvement in the business 


If you have employees, the trade licensing office may also request, for example:


    

  • employment contracts and work agreements 
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  • proof that statutory employer’s liability insurance has been arranged
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  • your application for entry in the OSSZ register of employers
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  • occupational health and safety training records
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The trade licensing office may request other documents too; it all depends on your particular trade and the scope of the inspection. If you are unsure about anything, you can contact your inspector directly, who will explain what they need. Inspectors appreciate a proactive approach and a pleasant manner. 😉


Do I have to attend the inspection in person?


You can attend in person, or a representative can act for you under your written power of attorney. The power of attorney must be officially certified. 


You can have a power of attorney or other documents officially certified at Czech POINT counters in Czech Post branches. 


What are the most common breaches to watch out for?


Labelling business premises


One thing business owners often forget is properly labelling their business premises. Inspectors make site visits and can photograph and document the state of your premises’ signage without your knowledge. 


Failure to label the registered office


Remember that the registered office of your business must also, by law, be labelled. Again, this is an obligation the inspector can easily check from outside.  


Failure to report changes


Whether you close business premises, change your registered office or suspend your business, all changes must be reported within 15 days.


Unauthorised business activities


You are invoicing for something for which you do not actually hold a trade licence. This is the most serious offence under the Trade Licensing Act. You can easily register new trades online through the Trade Licensing Portal using your data box. 


You can easily check for yourself whether you are committing this breach: review the activities you invoice your customers for (what you write on issued invoices) and check that all those activities are also recorded in the Trade Register.  


Missing details on documents


Received and issued invoices must include customer and supplier identification, including their company registration number (and tax identification number, where applicable), the tax document (document) number, issue date (and taxable supply date, where applicable), a description of the goods/services supplied and the price (excluding VAT and the VAT amount). 


The final, perhaps most often overlooked, item is stating where the business is registered. For self-employed people, this is the trade licensing office (you can find it in the Trade Register).




Companies must state their register file reference on invoices (you can find it in the Public Register). 


 


Complete invoices like these indicate to the trade licensing office that everything complies with the law. Incomplete documents, by contrast, may raise suspicions that your business issues fictitious invoices or includes documents in its accounts that are unrelated to the business.  


What if the inspector finds a problem?


Inspectors impose fines for breaches. The amount depends on the seriousness of the breach and is usually in the low thousands of korunas. However, the law allows fines of up to CZK 1 million for the most serious offences. 


In our experience, we have encountered two fines from the trade licensing office, both following inspections prompted by a complaint. The fines were as follows:


    

  • Fine for several business premises not recorded in the Trade Register – CZK 5,000
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  • Fine for incorrectly labelled business premises – CZK 1,500
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If everything is in order, there is no need to worry about an inspection. If you have any questions about trade licensing office inspections, please get in touch and we can look at it together. 😉