What is it?

It is a monthly amount intended to cover car running costs, regardless of actual expenditure. You do not pay this amount to anyone. It is simply a tax optimisation made in your income tax return.

What are the amounts and rules?
  • CZK 5,000 for each month the car is used in the business, if you use it solely for business purposes
  • CZK 4,000 for each month the car is used in the business, if you use it for both business and private purposes

In the month you buy or sell the car, you can claim a proportionate part of the monthly transport allowance. You must use the same method for a particular vehicle throughout the year. You cannot use the flat-rate transport allowance for the first 6 months and actual expenses for the next 6.

The flat-rate allowance can be used for up to 3 vehicles that you own or rent. Eligible vehicles include passenger cars, motorcycles, scooters, three-wheelers, quad bikes, special-purpose vehicles and lorries.

Who can use it?
  • a legal entity (company)
  • an individual claiming actual expenses in their return (a self-employed person or someone with rental income)
Who cannot use it?
  • Self-employed people or landlords claiming expenses as a percentage of income (lump-sum expenses, usually 60% for the self-employed or 30% for letting).
  • Self-employed people in the flat-rate tax scheme.
  • If you let another person use the car for part of the calendar month (for example, by hiring it out). The car may only be used by you as the business owner or company owner, your employees or a cooperating person.
  • If you acquired the car through a loan or finance lease.
Which costs does the flat-rate transport allowance cover?
  • fuel
  • short-term parking
Which costs are not included in the flat-rate transport allowance?
  • depreciation
  • repairs and maintenance
  • rental charges
  • long-term parking (for example, renting a garage or parking space)
  • insurance

When is the flat-rate transport allowance advantageous?

When the allowance is higher than the combined cost of fuel and short-term parking. 🙂 

Example)

As a business owner, you use a car in your business: 40% of journeys are business-related and 60% are private. You spend CZK 6,000 a month on fuel and parking.

Actual expenses – you can claim only expenses relating to business journeys: 

40% of CZK 6,000 -> CZK 2,400

Flat-rate transport allowance 

-> CZK 4,000

In this case, the flat-rate transport allowance is more advantageous. 🙂  

However, remember that you must reduce other car-related expenses to 40% because the vehicle is also used privately. Depreciation is claimed at the reduced rate of 80% in this case. 

You can easily calculate the ratio of business to private journeys from the kilometres recorded in your mileage log.

What about VAT-registered businesses?

You can use the flat-rate transport allowance even if you are VAT-registered. During the year, claim VAT on fuel and parking as usual. After the end of the year, compare actual fuel and parking costs excluding VAT with the flat-rate allowance to see which was higher. 🙂 

Generally, it is useful to record car running expenses in two categories: fuel plus parking, and other costs. You can then easily determine which expense method is more advantageous at year-end.

If you are unsure whether the flat-rate transport allowance is right for you, we will be happy to discuss everything at a consultation with you. 🙂