Czech gov’t propose flat income tax for entrepreneurs

The government has proposed allowing self-employed persons with an annual income of up to CZK 800,000 to pay a flat tax as of next year of CZK 5,740 crowns per month.

The flat-rate tax includes health insurance premiums of CZK 2,514, income tax in the symbolic amount of 100 crowns and a 15 percent higher minimum social insurance premium (CZK 3,126 as of 2020).

Finance Minister Alena Schillerová said the aim is to reduce bureaucracy, both in terms of administration and eliminating most reasons for tax office inspections.

The higher social insurance premium aims to help self-employed people save more for their retirement, as most now pay only the bare minimum. In opting for the flat tax, self-employed people would no longer be able to apply any other tax rebates and discounts, such as for dependent children.

Author: Brian Kenety