Commission Invoicing and Taxes for Affiliate Publishers

Most publishers remember their first commission payout. An e-mail arrives from the network saying your approved commissions have passed the payout threshold, and a button labelled "Issue invoice" or a ready-made document appears in the dashboard. That is the moment the second half of affiliate business begins, the half nobody talks about at conferences: who exactly do I invoice, do I need a trade licence for this, what about VAT when the network is registered in Slovakia, and how do I make sure that what landed in my bank account each month really matches what the dashboard reported. This is a practical overview for the Czech Republic, written by someone who runs several affiliate sites and at the same time owns e-shops with their own affiliate programmes, so commission invoices cross my desk from both directions.

One thing before anything else. I am not a tax adviser and this article is not tax advice. I describe the principles that come up again and again in affiliate work, but the specific rates, thresholds and deadlines change almost every year. Wherever you meet one, check the current figure with your accountant or on the Czech tax administration website. I mention Slovak differences only in general terms; a Slovak publisher should go through the rules with a local accountant.

When affiliate income counts as a business

Most new publishers wonder whether they need a trade licence at all. The answer follows from the legal definition of business activity: a continuous activity carried out independently, in your own name, at your own risk and with the aim of making a profit. An affiliate site with links in place, earning commissions month after month while you keep developing it, meets that definition without much doubt. It does not matter that the commissions are small at first. Continuity is judged by the nature of the activity, not by the size of the income.

In practice this means registering a trade. Affiliate promotion falls under the so-called free trade (typically fields such as advertising, marketing or brokering of trade and services), which requires no professional qualification. You file the notification at any trade licensing office or through a Czech POINT counter; the fee is a one-off and low. At the same time you register for income tax and sign up with the social security administration and your health insurer, which the trade office forwards on your behalf in a single form.

Occasional income, which is not taxed and needs no licence, is the exception rather than the rule in affiliate marketing. The law sets an annual limit for it and requires that the activity is not continuous. If you sent a course link to a few friends once a year and a single commission came in, you might argue it was occasional income. As soon as you have a website that generates commissions repeatedly, or you plan for it to, treat it as a business from the first crown. Catching up retroactively is more expensive and more unpleasant than registering the trade up front.

If you are already self-employed in another field, for example as a developer or a graphic designer, you simply add a field of activity to your existing licence. You do not need a new one. Students and employees who run affiliate sites on the side get a gentler regime for social and health contributions, but they still need the licence.

The principle in Slovakia is the same: a continuous profit-oriented activity requires a trade licence and affiliate marketing belongs among the free trades. What differs are the offices, the forms, the contribution thresholds and the point at which payments to the Slovak social insurance agency become compulsory. A Slovak publisher should verify those thresholds with their accountant.

Who invoices whom

This is where things get tangled most often, because the model depends on where your commission comes from.

A programme in an affiliate network. Your contract is with the network, not with the e-shop. The e-shop pays the network, the network pays you. You therefore invoice the network, using its billing details, even if you promote ten different e-shops through it. One network means one invoice per period regardless of the number of programmes. The exception is a network that operates separate legal entities for different markets; in that case the dashboard tells you which entity is your counterparty.

An e-shop's in-house programme. An e-shop that runs its programme directly (often on a rented platform such as AffilBox) is both your contractual partner and the party that pays you. You invoice it directly. If you promote five e-shops with in-house programmes, that is five counterparties and five invoices, each with its own payout threshold, its own cycle and its own payment terms. This is exactly where good records pay off most.

Self-billing. Some networks and larger programmes do not want an invoice from you because they issue one themselves, in your name, under the contractual consent you gave when you joined the network. You download the document from the dashboard and file it in your books as your own issued invoice. It sounds convenient and it is, but there are two catches: the document must match your actual situation (VAT payer or not, correct company ID and address), and your invoice numbering sequence splits into two. Agree with your accountant how such documents are filed so that the numbering remains traceable.

Payout thresholds and cycles. Neither a network nor an e-shop pays out every crown immediately. Commissions are first approved (after the e-shop's return period has passed, usually 14-45 days) and then accumulate until they exceed the payout threshold. Only then is a payout opened, either automatically on a fixed date or at your request. Most networks pay monthly; smaller in-house programmes often pay quarterly or "once enough has built up". The consequence for invoicing is that you invoice what has been approved and released for payment, not what the dashboard shows as reported. The gap between those two figures is at the heart of most misunderstandings, and I will come back to it in the section on records.

What belongs on the invoice

A commission invoice is an ordinary invoice for a service. Its mandatory content is set by the Accounting Act and, for VAT payers, by the VAT Act as well. The minimum a document must contain so that neither you nor the counterparty runs into trouble:

• your identification: name, registered address as listed in the trade register, company ID (IČO) and tax ID (DIČ) if you have one,
• the customer's identification: name, address, company ID, tax ID for VAT payers (for a foreign network, its VAT identification number),
• an invoice number from your continuous numbering sequence,
• the issue date and the date of supply (for monthly commissions usually the last day of the month or the date the payout was approved, as agreed with your accountant),
• a description of the service, for example "Commission for brokered sales, period 09/2026, programme XY", or a reference to the network statement,
• the amount, with a breakdown of base, rate and tax for VAT payers, or the sentence "Not a VAT payer" for everyone else,
• the due date and your bank account, ideally the one registered in the network dashboard.

If the counterparty is a foreign network, further VAT-related items are required, which I cover below. In practice it has proved useful to quote the statement number or period from the network in the description. The accountants on both sides then do not have to match amounts by hand.

You do not need an expensive invoicing tool; free tools or ones costing a few hundred crowns a year handle numbering sequences, foreign currencies and exports for your accountant. More important than the tool is the habit: the invoice is created on the same day the network opens the payout, not at the end of the quarter from memory.

VAT in principle

Value added tax is the least intuitive part for publishers and at the same time the area where mistakes with real financial consequences happen most often. So here are only the principles; check the specific turnover threshold, registration deadlines and forms with your accountant or on the tax administration website, because they have changed in recent years.

Registration based on turnover

As long as your turnover for the monitored period stays under the statutory threshold, you are not a VAT payer and do not show VAT on your invoices. Once you exceed the threshold, you are obliged to register and, from a certain date, must charge VAT on all domestic supplies. For a publisher this means that a Czech network or Czech e-shop will pay you more by the amount of VAT, but you pass that tax on to the state, so your net commission does not change. The upside is that you can reclaim VAT on business purchases (hosting, software, equipment). You need to monitor the threshold continuously and know over which period turnover is summed; that rule, too, has changed recently, so verify it.

A network in another EU country and the reverse charge

Many networks active on the Czech market are registered in Slovakia, Austria, Germany or elsewhere in the EU. You provide them with a service, and for services between businesses the place of supply is where the recipient is established. You therefore invoice without Czech VAT and the recipient accounts for the tax in its own country, a mechanism known as the reverse charge. The invoice must carry the VAT identification numbers of both parties and a note that the tax liability is reversed.

The snag is that even a non-VAT payer who provides a service to a business in another EU member state must register as a so-called identified person. This is not full VAT registration: you still do not charge VAT on domestic supplies and you have no right to deduct input VAT, but you receive a VAT identification number, you declare the cross-border supplies and you file an EC sales list for the months in which you invoiced into the EU. The same applies when you buy a service from a foreign company, typically advertising or software. Many publishers overlook this obligation because they think of themselves as small non-payers. If you invoice a network with a Slovak or other foreign VAT number, discuss the identified-person status with your accountant before you issue the first invoice.

Networks outside the EU, such as British or American ones, follow yet another regime. You invoice without VAT, but the EC sales list does not apply to them. Here too: check with your accountant.

In Slovakia VAT works on the same European principles, only with a different turnover threshold and a different form of registration for cross-border services. A Slovak publisher invoicing a Czech network deals with the mirror image of the same issue.

Income tax: flat-rate expenses or the flat tax

Commissions are income from self-employment. They are taxed in your annual tax return, and alongside the tax you pay social and health insurance contributions, in the case of a main activity through monthly advances and an annual settlement via the statements for the insurers. For calculating your tax base you have three methods to choose from, and the choice applies to the whole year.

Actual expenses. You keep tax records of income and expenses and tax the difference. This makes sense when your costs are high: you pay writers, PPC advertising, expensive tools or external development. For most content sites, however, actual costs are low.

Flat-rate expenses as a percentage. You do not document your expenses; you deduct a percentage of your income set by law for the given type of activity (for the free trade it is one of the higher percentages), up to an annual cap. For a publisher with hosting costing a few thousand crowns and otherwise mainly their own time, this is usually the most favourable route. You record only income and receivables; the rest is calculated. Verify the current percentages and cap, as these parameters have changed.

The flat tax (flat-rate regime). A single monthly payment covering income tax and both insurance contributions, with no tax return and no insurance statements, provided you meet the conditions: you are not a VAT payer, your self-employment income does not exceed the statutory limit and you have no concurrent employment income that would exclude you from the regime. The regime has bands by income level, and you notify the tax office of your entry at the beginning of the year. For a publisher invoicing only Czech entities it is the most convenient option. Watch out for the clash with VAT registration: an identified person may be in the flat-rate regime, a VAT payer may not. This is precisely where you should have your accountant calculate what actually pays off, because it depends on your income level, on your other income and on whether the flat-rate regime takes away tax credits and deductions you would otherwise claim.

Slovakia has no flat tax in the Czech sense, but it does know percentage-based flat-rate expenses with its own cap and different contribution thresholds. The principle of choosing between actual and flat-rate expenses is similar.

Two more notes from practice. Commissions in foreign currency are converted into crowns at a rate you choose according to the rules for tax records (the daily central bank rate or the uniform annual rate), applied consistently throughout the year. And income arises when the money arrives in your account, not when the commission is reported in the dashboard; December commissions paid in January belong to the following year.

Keeping records by programme and month

If I had to pick one thing I would have set up differently at the start, it is record keeping. Network dashboards are good for the detail of a single campaign, but none of them will show you an overview across three networks, two in-house programmes and twelve months. Without your own overview you do not know what to invoice, what is missing and which programme is actually worth your effort.

Why you need to track more than one number:

• Reported commission is everything the tracking recorded, including orders the e-shop has not yet approved.
• Pending commission is the part of the reported figure awaiting approval. The e-shop can also cancel it if the customer returns the goods or never pays.
• Approved commission is the confirmed amount that counts towards the payout threshold.
• Paid commission is what actually arrived in your bank account.

The gap between reported and paid commission can run to tens of percent; in fashion, cancellations due to returned parcels are a routine part of every month. If you record only the reported figure, you have a distorted picture of profitability and your invoice will not hit the amount the network accepts.

A simple table that is enough for most publishers:

The figures are illustrative, but the mechanics are real: programme B earned little in August, so it was invoiced in October for two months together, and that is exactly the kind of situation that gets forgotten without a table.

Checking payouts against the network statement should be a monthly routine. For each payout the network generates a statement broken down by programme. Compare it with your record of approved commissions, then with the invoice you issued, and finally with the payment credited to your account. The most common findings: the network deducted a transfer fee, a commission from one programme was cancelled after the cut-off, or the payment arrived in euros and your bank converted it at a different rate. Every difference is either explained or raised with network support, and right away, not six months later when filing your return.

Alongside commissions, record the revenue you brought to the e-shop. Towards the e-shop it is your strongest argument when negotiating a higher commission, and towards yourself it is the yardstick for whether a programme is worth continuing. A programme paying 4 % on revenue of 200,000 crowns a month is a better partner than one paying 12 % on revenue of 10,000, even though the second looks more attractive in the catalogue.

Common mistakes

The forgotten invoice. The network opens a payout, you happen to be busy with the site, and the invoice gets issued two months later. With networks that do not pay without an invoice, this means the money sits with them and you have deprived yourself of cash flow. Worse still when the year end falls in between and the November commission ends up in the next tax period, where it may not be favourable.

The unwatched payout threshold. With in-house programmes that have a high threshold and low volume, you may not reach a payout for a year. Sometimes it helps to agree a lower threshold or an annual settlement with the affiliate manager; sometimes it is better to replace the programme. Without records you will not even notice.

Missing or fragmented records. Three networks, four in-house programmes, two currencies, and everything "in your head" or in e-mails. When filing your return you dig for statements and cannot tell whether the March invoice was for February or for the first quarter.

Invoicing the wrong entity. When promoting through a network you issue the invoice to the e-shop because, after all, you have been exchanging e-mails with its manager. The e-shop cannot accept it and the network will not pay without its own invoice.

Overlooked self-billing. You issue your own invoice to a network that has already issued the document on your behalf. The result is two documents for one supply and an unnecessary query from your accountant or the tax office.

Ignoring the identified-person status. You spend a year invoicing a Slovak network as a non-payer, without registration and without EC sales lists. It can be fixed retroactively, but it is unpleasant and may bring penalties.

Confusing gross and net commission. Some networks show commission in the dashboard after deducting their share, others before it. If you invoice the gross amount, the network sends the invoice back.

How the publisher account on AffilPlanet helps

AffilPlanet is a catalogue of affiliate programmes and publishers, not a network. It pays nothing out, tracks nothing and does no accounting, so it cannot replace an accountant or an invoicing tool. It can, however, keep an eye on the part of the admin that slips through a publisher's fingers most often.

For every programme you mark as promoted in your publisher account, you set an invoicing period, monthly or quarterly, and the account sends you a reminder when an invoice is due. With in-house programmes on differing cycles this is more pleasant than a calendar with eight recurring events. For each programme you enter monthly revenue and commission, which is exactly the table from the previous section, only without the spreadsheet, and the account builds a chart across all your programmes from it. At a glance you see which programme brings you the most, where commission is falling and where months without an entry are piling up. On top of that, your affiliate links and discount codes are stored with each programme, and you receive a notification when an e-shop changes its commission or terms, information you need in your records anyway.

What it can and cannot do is summarised on the page for publishers. The account is free, registration takes a few minutes and you can add your first programme straight from the catalogue.

Checklist before your first invoicing period

1. Free trade registered, income tax registration done, registered with the social security administration and your health insurer.
2. Decision on how to claim expenses, or on entering the flat-rate regime, confirmed with your accountant.
3. A list of counterparties: which network, which e-shop, their billing details, VAT numbers, payout threshold, cycle, self-billing yes or no.
4. For foreign networks, the identified-person question settled and the invoice content correct.
5. An invoicing tool with a single numbering sequence and a template for commissions.
6. Records by programme and month, updated at every payout, plus a monthly check of payouts against statements.
7. Invoicing reminders, whether in your calendar or in your publisher account.

Once you have this in place, admin stops being an obstacle and turns into a quarter of an hour a month. The time you save is better spent choosing further programmes and writing the content that actually brings in the commissions.