People have the last two weeks to enter the flat tax regime. This year, interest in it fell short of expectations, which will probably be repeated next year, also due to rapid inflation.
The self-employed (self-employed), such as self-employed persons, have had the last two weeks to apply for the flat-rate tax scheme. The flat tax means that the self-employed will reduce the time they have to spend “paperwork”. One flat tax – a one regular monthly payment – it will replace both the tax itself and social and health insurance premiums. In addition, there is no need to file a tax return.
It is important that those self-employed persons who can and wish to enter the flat-rate tax scheme must notify the to the tax office no later than 10 January 2022. If this deadline is missed, the situation can no longer be reversed and given The self-employed must wait until 2023 to enter the flat tax regime.
In response to the CNB’s move, Trinity Bank raised interest rates on savings above three percent
Trinity Bank responds to the increase in CNB interest rates by raising the rate on the savings account to 3.08 percent per year.
For next year, the flat tax is CZK 5,994 per month, ie CZK 71,928 for the whole year. The flat tax will consist of a minimum contribution to health insurance (2627 crowns), a 15 percent increase in the minimum contribution to social insurance (3267 crowns) and personal income tax in the same amount as this year – 100 crowns.
No additional benefits
However, a taxpayer who decides to enter the flat tax regime loses the opportunity to apply, for example, a taxpayer discount, a spouse discount or a disability discount. It also cannot claim mortgage interest or contributions to life or pension insurance and others. Every self-employed person must therefore carefully calculate whether the flat-rate tax scheme will pay off.
Industry Captains Survey: What is the main challenge for 2022?
What will be the main challenge for Czech industry next year? We have addressed its captains, owners and directors of major companies in cooperation with the Confederation of Industry and Transport, and we bring a unique survey on this topic. Each company solves its own challenges. But some problems are common to all. In addition to the pandemic and rising inflation, the leaders of the companies that are driving the domestic economy are also bothered by staff shortages or ambiguities surrounding the Green Deal. On the contrary, he sees an opportunity in the spread of new technologies, whether it is electromobility or other smart solutions. The key people in the industry do not see any black scenarios in front of them, on the contrary, they believe that the domestic economy will tread again.
A flat tax will save traders time and paperwork, as they will not have to communicate with three different authorities, but only with one. They will get rid of complicated administration, and in addition they will have peace of mind from possible controls from the tax office.
However, the transition to a flat tax will pay off for some of the self-employed. In total, according to previous year’s estimates, it was supposed to pay off to about 140,000 taxpayers just over 70,000 self-employed persons entered the regime.
VAT limit too low
The reason for the low interest is also that it concerns only non-VAT payers, ie only self-employed persons who have a lower annual turnover than one million crowns. Even due to the current rapid inflation, the fastest since 2008, the threshold thus set, which is already relatively low, is an increasingly important barrier to entry. However, if the Czech Republic obtained an exemption from the EU to increase the annual turnover limit, for example to two million crowns, the number of self-employed persons who use the flat tax regime could increase to the level of 200,000.
For example, the flat tax is not paid to artisans or farmers who use an 80% flat rate. Of those self-employed who apply a 60% flat rate, the flat tax will be paid mainly to those with higher incomes (not exceeding the million limit, of course) who do not have children or a wife at the same time. But literally a “ternem” can be a flat tax for many self-employed people, or self-employed people who apply a 40% flat rate (eg authors of texts).
Year 2021: A country in need and a turning point
The Czechia entered 2021 with the then highest coronavirus epidemic risk index of 90 points. The PES table still applied. The situation was unhappy even according to Prime Minister Andrej Babiš (YES). As he stated in his New Year’s speech, he was unable to control the covid infection, he called vaccination a hope. But that, as we can see in the rearview mirror, has lagged considerably for almost a year.
This year, the koruna strengthened against the euro as the only currency of the Visegrad Group
For the first time since February 2020, ie before the outbreak of the pandemic, the Czech koruna strengthened below the level of 25 crowns per euro. According to Bloomberg, she broke this psychological frontier shortly before 2:30 p.m. CET. It strengthened to the level of 24.972 per euro. Subsequently, however, she handed over part of her profits and the exchange rate returned above the level of 25 crowns per euro. Even so, the Czech currency is the only currency in the Visegrad Group to strengthen against the euro this year.
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