The flat-rate tax (paušální daň) is a simplified tax regime in the Czech Republic designed for self-employed individuals (OSVČ). Its core principle is that the entrepreneur pays just one single monthly payment, which covers the income tax advance, social security contributions, and health insurance contributions. The goal of this regime, introduced in 2021, is to significantly reduce the administrative burden for small sole proprietors and entrepreneurs.
Entering the flat-rate tax regime is voluntary and is available to self-employed persons with annual revenues up to CZK 2 million who are not VAT payers. Once registered for the regime, the obligation to file an annual tax return and the statements for the insurance authorities is waived. The main disadvantage is that it is not possible to claim any tax credits (e.g., for children, a spouse) or deductions (e.g., mortgage interest) within this regime. The amount of the monthly flat-rate payment for 2025 is set in several bands based on the level and nature of the income.
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