Paušální daň

Under Czech law

The flat-tax regime (paušální režim) was introduced into the Income Tax Act (Act No. 586/1992 Sb.) with effect from 2021. Self-employed individuals (OSVČ) who are not VAT payers and stay under the statutory income ceiling — 2 000 000 Kč, split into three bands since 2023 — may opt in by notification to the tax office by 10 January. One monthly payment then covers income tax, social security and health insurance; in exchange, no income-tax return and no insurance overviews are filed for a clean flat-tax year, and expenses (real or percentage) become irrelevant.

The trade-offs: no tax credits or deductions (mortgage interest, children, spouse), and falling out of the conditions mid-year — crossing the ceiling, becoming a VAT payer, adding employment income — retroactively unravels the simplicity.

A practical example

A consultant with 1.4 million Kč of annual income and minimal expenses pays the second-band flat amount monthly and files nothing in spring. Her neighbour, same income but with two children, a mortgage and a non-working spouse, calculates both ways and stays out of the regime: the credits and deductions he would forfeit exceed the flat tax''s savings.

When you need a lawyer

Rather a tax adviser than a lawyer for the arithmetic — but legal help matters at the edges: combined income structures, the VAT interaction, and disputes with the tax office over whether the conditions were met after the fact.