New rules for Lump sum tax („Paušální daň“) from 1.1.2023

- If you register for Lump sum tax, you will pay only one monthly payment which will include income tax, social and health insurance together. After year end you don`t need to file any tax return or pay any additional taxes in case you pass the criteria for the Lump sum tax.

-If you want to register for the tax, the self-employment income must be your ONLY income for the year (with some minor exceptions);

-Please note that if you register for the lump sum tax, you will not be able in future to get any proof of income from the tax office or any copy of tax return which might be important in visa or residency process.

Newly introduced 3 zones, which is derived according to nature and amount of income

1.     ZONE

Self employed with income up to 2 million CZK, if most income (at least 75%) is income on which can be applied 80% lump sum expenses (ex. Agriculture income or income from craft trade for which is needed licence)

Self employed with income up to 1,5 million CZK, if most income (at least 75%) is income on which can be applied 60% lump sum expenses (ex.  income from non-craft trade; most usual free trade licence)

All self-employed with income up to 1 million CZK in other cases – more than 25% income is income on which can be applied 40% lump sum expenses (ex. Income of auditors, lawyers, tax advisors,etc.)

-Monthly payment of lump sum tax is 6 208 CZK

2.     ZONE

Self-employed with income from 1,5 to 2 million CZK, if most income (at least 75%) is income on which can be applied 60% lump sum expenses

Self-employed with income from 1 to 1,5 million CZK, if more than 25% income is income on which can be applied 40% lump sum expenses

-Monthly payment of lump sum tax is 16 000 CZK

3.     ZONE

Self-employed with income from 1,5 to 2 million CZK, if more than 25% income is income on which can be applied 40% lump sum expenses (lawyers, auditors..)

-Monthly payment of lump sum tax is 26 000 CZK

Examples for determining the zone:

Self employed person with usual free trade licence – if he has income up to 1,5 million CZK →1.ZONE, if he has income 1,5-2 million CZK → 2.ZONE

REGISTRATION and PAYMENT TERMS

Deadline for registration to lump sum tax regime is 10th January 2023.

Monthly payment must be paid till 20th of respective month.

RECAPITULATION CONDITIONS FOR ENTRY TO LUMP SUM TAX REGIME

Annual income from self-employment up to 2 million CZK

Not VAT payer

No income from employment (exemption: employement income with witholding tax)

No other income (rent income, income from capital assets or other occasional income).

OUR SERVICE:

800 czk – registration for the Lump sum tax for 2023

1000 czk – calculation if the lump sum tax will be advantageous for you in 2023

500 czk – consultation if you pass the criteria of lump sum tax for 2023