Flat-rate expenses for self-employed workers in 2024: advantages and disadvantages
Since recording actual expenses is relatively administratively demanding, most self-employed persons choose the option of applying flat-rate expenses. Flat-rate expenses are applied as a percentage of income . The self-employed person deducts the expenses calculated in this way from his income in his tax return , which creates a tax base. He therefore does not have to document any actual costs.
The percentage is determined by the type of activity and the flat-rate expense rates will not change in 2024:
80% of income from agricultural production, forestry and water management and income from trade and craft business; the maximum amount of expenses claimed in this way is CZK 1,600,000.
60% of income from trade (so-called free, tied and licensed trades); the maximum amount of expenses claimed in this way is CZK 1,200,000.
40% of other income from independent activities
30% of income from the rental of property included in chinese overseas australia database business property and income from the rental of real estate or apartments; the maximum amount of expenses claimed in this way is CZK 600,000.
In practice, you don’t have to deal with anything during the year, just record your income (issued invoices). You don’t even have to register for lump sum expenses. In your tax return, you just state that you claim lump sum expenses and the amount.
Benefits of spending as a percentage of income
Minimal administrative burden throughout the year,
lump sum expenses are often higher than actual expenses, which saves you money (you have a lower tax base),
you can claim a number of tax credits, deductible items and benefits ,
You will save on accountant fees – you can file your tax return yourself.
Flat-rate expenses are disadvantageous only for those self-employed persons whose actual expenses significantly exceed the flat-rate ones . However, in the case of recording actual expenses, you must also take into account your extra time and often the services of an accountant. Therefore, recording actual expenses only pays off when the financial difference represents several tens of thousands of CZK per year.
Flat-rate self-employed tax in 2024: advantages and disadvantages
While lump sum payments are an administratively digital marketplace: the biggest and cheapest showcase in the world undemanding option, lump sum tax actually has zero administrative burden for entrepreneurs . Simply put, you only send one payment every month, which includes social security and health insurance contributions as well as tax. Apart from that, you don’t have to do anything at all.
However, not every self-employed person can use the flat-rate thailand data tax and it is not worth it for everyone. This is especially because in the flat-rate tax regime you lose the right to all tax discounts and deductions . Therefore, the flat-rate tax is not paid, for example, to most parents who apply the tax bonus for children . In addition, it is necessary to register for the flat-rate regime , always by January 10 of the relevant year.
TipAccounts for legal entities and sole proprietors from ČSOB are free of management fees and without any conditions , including free contactless payment cards. Open a corporate and business account online in a few minutes.
So what are the conditions for entering the flat-rate regime ?
Your income must be up to CZK 2 million.
Flat tax amount in 2024
The amount of the monthly flat tax depends on the amount of income of the self-employed person and the type of activity.