Flat-tax limits: what breaks the regime and how to leave

The regime is entered once and tested all year. Some breaches have to be reported within 15 days, and a band that no longer matches your income costs you the whole simplification.

Deadline: 15 days · 10 January

Notice of a failed condition within 15 days. Voluntary exit by 10 January.

Open the flat-tax calculator

Limits that have to hold all year

Four conditions have to hold for the entire tax period. Any one of them failing is enough.

§7 income at or below 2 000 000 CZK.
§8, §9 and §10 income together at or below 50 000 CZK.
No VAT registration and no obligation to register.
No employment income beyond income taxed at source by withholding.

What breaks it during the year

Most breaches are events you can see coming, which is why the limits are worth watching monthly.

Passing the income limit, or the ceiling of the band you are paying.
Becoming a VAT payer, including by passing the turnover threshold.
Taking a job with taxable employment income, or entering a partnership as a partner.

Reporting a breach

A failed condition does not wait for the year to end, and the notice is what keeps the situation manageable.

You notify the tax office within 15 days of the day the condition failed.
Payments already made are not lost. They count towards the tax and insurance you then settle in the normal way.
For that year you file an income tax return and both insurance overviews, because the flat tax is not determined.

Leaving on purpose

Voluntary exit is the mirror of entry: a notice, bound to the same date.

The exit notice is due by 10 January of the year you want out of.
A change of band for the coming year is notified the same way and on the same date.
You can come back in a later year, provided every condition holds for that whole period.

Common questions

I passed my band's ceiling but stayed under 2 000 000 CZK. What happens?

The flat tax is not determined for that year. You file a normal return and both overviews, and what you paid monthly counts against the result. The regime itself can continue, and you notify the higher band for the following year.

I crossed the VAT turnover threshold in October. Do I lose the whole year?

The flat tax is not determined for that year, so you file the return and both overviews. The notice about the failed condition is due within 15 days, and staying registered for VAT rules the regime out for the years that follow.

How do I know in advance?

Watch the two limits against real figures during the year rather than at year end: §7 income against your band's ceiling and the 2 000 000 CZK limit, and §8, §9 and §10 income together against 50 000 CZK. Both are known long before January.

Test the limits before January

The flat-tax calculator tests your income against the bands and shows what the standard regimes would cost instead.