Self-employed persons using the flat-rate scheme: Which obligations to think about at the beginning of the year

The flat-rate tax regime is a welcome simplification for many self-employed persons (“OSVČ”) – instead of filing tax returns and annual reports with the Czech Social Security Administration and health insurance company, self-employed persons in the flat-rate regime only need to pay a single monthly amount, which includes income tax, social security contributions, and public health insurance. Although the regime reduces the administrative burden, this does not mean that entrepreneurs have no obligations – January is precisely the time when even self-employed persons under the flat-rate regime need to pay attention to ensure that the rest of the year goes smoothly.

Conditions for entry into the flat-rate scheme

Only a self-employed person who meets all the statutory conditions can enter the flat-rate scheme, in particular:

• not a VAT payer,
• its annual income does not exceed CZK 2,000,000,
• no income from employment (except income subject to withholding tax),
• not in insolvency proceedings,
• is neither a partner in a public partnership nor a general partner in a limited partnership,
• did not exceed the income limit applicable to the selected band in the previous year,
• did not have other taxable income above the statutory limit when starting the business during the year.

Failure to meet any of these conditions means that the self-employed person cannot use the flat-rate scheme.

Entry into the flat-rate scheme from 2026

Entrepreneurs who decide to use the flat-rate tax for the first time from 2026 onwards must notify the tax authorities of their intention to do so. The law provides for a ten-day period from the beginning of the year, and given 10 January 2026 falls on a Saturday, the last day for filing the notice this year is 12 January 2026. If the self-employed person has a mandatory data box, he/she must submit the notification electronically. The tax administrator does not issue any decision on entry into the scheme.

What do those, who are already in the flat-rate scheme, have to do?

Self-employed persons who are already using the flat-rate scheme and wish to continue it in 2026 do not need to notify the tax office to continue. However, it should be borne in mind that if the conditions of the regime are violated during the year (in particular if income limits are exceeded or the income structure changes), there may be a reporting obligation or even an obligation to file a tax return and pay the difference in tax.

If a self-employed person wants to voluntarily withdraw from the flat-rate scheme, he or she must again notify the tax administrator of this intention by 12 January 2026. If there are facts which cause the self-employed person to cease to be a taxpayer under the flat-rate scheme, he or she will not be able to continue in the flat-rate scheme.

Exceeding limits and notification obligation

If the limits set for the chosen flat-rate tax band are exceeded, the self-employed person is obliged to actively address the situation. Typically, this means:

• submit a Notification of a different flat-rate tax amount and pay the difference between the advances paid and the correct flat rate tax,
• if applicable, submit a Notification of a change in the selected tax band for the following tax period.

If these notifications are not made on time (i.e. by 12 January 2026), the entrepreneur may be required to file a standard tax return and associated annual statements, thereby forfeiting the main benefit of the flat-rate scheme for that year.

New flat-rate advance payments from 2026

At the same time, the payment side of the matter must be kept in mind – from 1 January 2026, the amount of flat-rate advance payments in the first band will change. The advance payments in the second and third band remain unchanged.

Advance payments are always due by the 20th of the given month. If you have set up a standing order for advance payments in Band 1, you must adjust it by 20 January 2026 at the latest.

An exception applies to self-employed persons who are just starting their independent activity and entering the flat-rate regime – in this case, the due date of the first advance payment is postponed until the 20th day of the following month, together with the advance payment for this following month (i.e. when starting their activity and entering the flat-rate regime in January 2026, the self-employed person will pay the advance payment for January and February by 20 February 2026).

If you are unsure whether any of the above situations apply to you, we will be happy to help you assess your specific situation and ensure compliance with the applicable legislation.