Termination of the flat-rate scheme, failure to meet the conditions for entry into the flat-rate scheme, voluntary withdrawal from the flat-rate scheme, change of bracket, or flat-rate tax surcharge

Main information about the service

Does this apply to me?

On the first day of the relevant tax year or on the date of commencement of the activity, one of the facts has occurred which results in the non-fulfilment of the conditions for entry into the flat-rate scheme, for example when: 

• you are not a self-employed person under the law governing pension insurance who is subject to the legislation governing pension insurance;
• you are not a self-employed person under the law governing public health insurance who is subject to the law governing public health insurance and is not exempt from paying public health insurance premiums because of your long-term stay abroad;
• you have exceeded the qualifying income for your chosen flat-rate scheme bracket in the immediately preceding tax year;
• you are a value added tax payer or have become liable for value added tax, except for the registration obligation of an identified person;
• you are a partner in a public company or a general partner in a limited partnership;
• you are a debtor against whom insolvency proceedings have been opened;
• you were engaged in an activity from which income from employment is derived, with the exception of income on which tax is withheld at a special rate;
• you were subject to value added tax in the part of the relevant tax year prior to the date of commencement of this activity;
• you were a partner in a public partnership or a general partner in a limited partnership for part of the relevant tax year before the date of commencement of the activity;
• you were engaged in an activity from which self-employment income was derived for part of the relevant tax year before the date of commencement of the activity and you were not a flat-rate taxpayer;
• in the part of the relevant tax year prior to the date of commencement of this activity, you did not have only tax-exempt income, income that is not subject to tax, income on which tax is levied by withholding according to a special tax rate, and you had income from capital assets, rental income and other income, the total amount of which exceeded CZK 50 000 (until the 2022 tax year it exceeded CZK 15 000);
• you were engaged in an activity from which income from employment arises in the part of the relevant tax year before the date of commencement of the activity, except for income on which tax is withheld at a special rate.

During the tax year, one of the events that results in the termination of the flat-rate scheme occurs, for example, if: 

• you have exceeded the qualifying income for your chosen flat-rate bracket and your tax is not equal to the flat-rate tax;
• you have become a VAT payer or have become liable for VAT, with the exception of the registration obligation of an identified person;
• you have become a partner in a public partnership or a general partner in a limited partnership; 
• the decision on your insolvency has come into force and the insolvency proceedings were not closed by the end of the tax year;
• you have ceased to be self-employed under the law governing pension insurance or the law governing public health insurance;
• you are no longer covered by Czech legislation on pension insurance or Czech legislation on public health insurance;
• you are not obliged to pay public health insurance premiums because of your long-term stay abroad;
• you have ceased to carry out an activity in the Czech Republic from which you derive income from self-employment and have transferred your tax residency abroad.

You have filed a notice of change in your chosen flat-rate bracket for the tax year:

• whereby the conditions for the chosen flat-rate bracket were not met.

You have filed a notification of a different flat rate of tax for the taxable year:

• whereby the conditions for a different flat-rate tax were not met. 

You are notifying that you are voluntarily opting out of the flat-rate scheme:

• whereby the tax is equal to a flat-rate tax in the relevant period, or
• you do not want to be a flat-rate taxpayer for the following tax year.

Service outcome

Notification of a statutory fact, change under the flat-rate scheme (change of bracket or tax), termination of the flat-rate scheme

Service benefit

You will have the option to declare that you do not meet the conditions necessary to remain in the flat-rate scheme, to voluntarily withdraw from the flat-rate scheme, or to change the chosen flat-rate bracket or the amount of the flat-rate tax.

When to address the service

• NOTIFICATION OF FAILURE TO COMPLY WITH THE CONDITIONS UNDER THE FLAT-RATE SCHEME – You must notify the tax administrator of your failure to comply with the statutory conditions, including the reason for which you failed to comply, within 15 days of the date on which you became aware of the failure.
• NOTIFICATION OF VOLUNTARY WITHDRAWAL FROM the flat-rate scheme – You may submit a notification of voluntary withdrawal from the flat-rate scheme to the tax administrator by the tenth day of the tax period immediately following the tax period after which you will cease to be a taxpayer in the flat-rate scheme. In the notification of voluntary withdrawal from the flat-rate scheme, you indicate the tax period after which you will cease to be a flat-rate scheme taxpayer. A notification of voluntary withdrawal from the flat-rate scheme given after the deadline shall be ineffective.
• NOTIFICATION OF TERMINATION of the flat-rate scheme - If a fact has occurred that results in you ceasing to be a taxpayer in the flat-rate scheme, you must notify the tax administrator of this fact within 15 days of the date on which this fact occurred.
• NOTIFICATION of a change of the chosen bracket of the flat-rate scheme – As a taxpayer in the flat-rate scheme, you can submit this notification to the tax administrator by the tenth day of the tax period from which you change the chosen bracket of the flat-rate scheme. A notification of a change in the chosen flat-rate bracket made after the deadline is ineffective. This period cannot be reverted to its previous state. 
• NOTIFICATION of a different amount of flat-rate tax – As a taxpayer in the flat-rate scheme, you can submit this notification to the tax administrator by the tenth day of the tax period from which you are changing the amount of the flat-rate tax. A notification of a different amount of flat-rate tax made after the deadline is ineffective. This period cannot be reverted to its previous state. 

How to get the service

Responsible Public Authority

Additional information about the service

Communication language

Czech

Last checked at 16.06.2023