As we have previously informed you, the institution of a new flat-rate tax was introduced into law with effect from 1 January 2021.
Taxpayers may voluntarily apply for it if:
- they are self-employed,
- they are not VAT payers and do not have a registration obligation for that tax (except for the registration obligation of an identified person),
- they are not a partner in a publicly-traded company or a general partner in a limited partnership company,
- are not a debtor against whom insolvency proceedings have been initiated,
- in the tax period immediately preceding the relevant tax period, they did not have income from independent activities exceeding CZK 1,000,000 (except for income exempt from tax, income that is not subject to tax, and income from which tax is collected by deduction at a special tax rate) and
- as at the first day of the relevant tax period, they were not carrying out any activity from which income from a dependent activity derives (except for income from which the tax is collected by deduction at a special tax rate).
If the taxpayer has met all the above legal conditions, it could apply for the flat-rate scheme for 2021 by submitting a notification, which had to be submitted for the relevant period of the 2021 tax year no later than Monday, 11 January 2021.
Please note that if a taxpayer started its self-employed activity during the period for advances and would like to apply to the flat-rate scheme during this period, it is always necessary to check whether or not it at the start of self-employed activity had fulfilled the conditions for entering the flat-rate scheme. Since the conditions for entering the flat-rate scheme are linked to the beginning of the relevant tax period and are tested as at the date of starting this activity, it is possible that the taxpayer will not meet the conditions and will be able to enter the flat-rate scheme only beginning with the following period for advances (e.g. if the taxpayer had, in the tax period before the commencement of the independent activity, income from a dependent activity).
The amount of the flat-rate tax includes:
- the taxpayer's advance on the flat-rate income tax regime,
- an advance on pension insurance premiums, which means the taxpayer's advance in the flat-rate scheme for pension insurance premiums and the contribution to the state employment policy,
- an advance on health insurance premiums, which means the taxpayer's advance payment in the flat-rate regime for public health insurance premiums.
In the 2021 period for advances, the taxpayer's advance payment within the flat-rate regime amounted to CZK 5,469 per month (i.e. the taxpayer's advance payment in the flat-rate regime for income tax of CZK 100, the advance payment for pension insurance premiums of CZK 2,976 and the advance payment for health insurance premiums of CZK 2,393).
Since advances on pension and sickness insurance premiums in the flat-rate scheme are governed by the legislation governing such insurance and are based on the minimum assessment bases, there was a change in the amount of the flat-rate tax for the 2022 period for advances, as follows:
- the taxpayer's advance within the flat-rate income tax regime is CZK 100,
- the advance payment for pension insurance premiums is CZK 3,267,
- the advance payment for health insurance premiums is CZK 2,627.
The total amount of the flat-rate tax for the 2022 period for advances is therefore CZK 5,994 per month.
For the sake of completeness, we would remind you that the flat-rate advance is payable by the 20th day of the period for advances (calendar month) for which the advance is paid and must be paid to the bank account of the relevant local tax administrator (tax office). If all legal conditions for remaining in the flat-rate regime are met throughout the tax period, there is no requirement to file tax returns and insurance summaries.
If a taxpayer wishes to apply to the flat-rate scheme for the relevant period of the 2022 tax year, he must submit a notification for entry into the flat-rate scheme on the form issued by the Ministry of Finance at the latest by 10 January 2022.
