Registration for flat-rate tax for 2021 is possible only until 10.1.2021. New business owners must register on their first day of business. Registration uses a simple interactive form available on the Financial Administration website.
However, you can already calculate on the Ministry of Finance website whether it will benefit you. The main conditions are turnover below CZK 1 million a year (the threshold increased to CZK 2 million from 2023), no VAT registration and no insolvency. Further conditions include not simultaneously being employed under an ordinary employment contract. You also cannot work under a DPP agreement with pay above CZK 10,000, or a DPČ agreement with an upper limit of CZK 3,500 (increased to CZK 4,000 from 2023). Another important condition is that you must not have signed a taxpayer declaration (the “pink form”) anywhere to claim the basic tax credit.
The situation is slightly more complicated for new business owners starting their activity during 2021. These business owners can register for flat-rate tax on the day their activity starts. Take care to meet the conditions throughout the year, including the period before starting business.
I will register existing clients for this tax on request; let me know by email if you are interested. 🙂
The new flat-rate tax is advantageous! Or is it?
The main advantage will be simpler paperwork for the self-employed. Just one standing order is enough. The tax offices also promise fewer inspections, which I find misleading because there is not much to inspect for a self-employed person currently claiming lump-sum expenses either. 🙂
The main disadvantage will be that self-employed people cannot claim any tax deductions or credits (e.g. mortgage interest, spouse credit, child credits, etc.). In particular, those claiming child credits will not be able to receive a tax bonus.
I discuss flat-rate tax in further articles, particularly the final tax return and leaving the scheme.
If you are unsure, do not hesitate to get in touch and we will look at it together. 🙂