With tax deadlines approaching, it is crucial for the self-employed to be well informed about the deadlines and how to file tax and expense returns. The deadline for filing tax returns for the year 2023 varies depending on the mode of filing and the type of taxpayer.
Self-employed persons are obliged to submit a summary of their income and expenses to the ČSSZ and their health insurance company within 30 days of submitting their income tax return (DAP). The Social Security Administration determines the date of submission of the summary based on the information recorded by the self-employed person in lines 40 and 41 of the summary. If the summary is submitted by a tax advisor, this information must be entered in line 41 of the summary for the year. The earliest deadlines for the submission of the 2023 tax return for self-employed persons are :
– Monday 8 April 2024: This date applies to those who are not obliged to file a tax return, such as self-employed persons with zero income.
– Thursday 2 May 2024: This is the deadline for those who can still submit a paper return. This applies to self-employed persons with a compulsory data box, who must only report electronically.
– Monday 3 June 2024: If the tax return is submitted electronically by 2 May 2024, this mode applies to self-employed persons with a mandatory data box.
– Thursday 1 August 2024: If the tax return is submitted by a tax advisor or if you are subject to a statutory audit, the deadline extends to this date.
Furthermore, it is important to note that self-employed persons with an annual income of more than CZK 50,000 are obliged to file a tax return. However, regardless of income, everyone must file reports, even if you have only been in business for a month or have not earned any crowns.
Exceptions include flat-rate taxpayers
Flat-rate taxpayers enjoy considerable tax advantages, saving on taxes and compulsory insurance premiums. They do not have to file annual tax returns or reports for health insurance companies and the Czech Social Security Agency. These benefits are linked to the introduction of the flat tax, in force since last year. The flat tax has seen an increase, but still offers significant benefits. It is possible to apply for it every year until January. Flat-rate taxpayers only have to pay the minimum monthly advances for health insurance, the lowest possible payments for social insurance (increased by 15%) and finally an income tax of 100 crowns. Entrepreneurs are exempt from paying advances to the Social Insurance Institution when they are entitled to sick pay, PPM or long-term sick pay from the self-employed person’s health insurance for the entire month. This also includes the first 14 days of temporary inability to work (quarantine), during which no sickness allowance is paid. In addition, self-employed persons with a secondary occupation are exempt from paying advances to the Social Security Institute from the month in which they provide a certificate from their employer(s) stating that they have reached the maximum assessment basis for employment, until the month preceding the month in which they submit their income and expenditure statements for the following calendar year. In the first year of secondary employment, social security and health insurance contributions do not have to be paid and if the annual income is less than 2.4 times the national average monthly salary, nothing is payable. Thereafter, the insurance is paid in a lump sum when you submit your income and expenses declaration.
How and to whom should I submit the report?
Reports must be submitted to the local social security administration (in Prague, divided by districts) and to the health insurance company. Although since last year all self-employed persons are obliged to have a data box and to communicate with the authorities electronically, neither the health insurance companies nor the ČSSZ insist on electronic submission. Therefore, reports can be sent by post or delivered to a branch. The preferred and easiest form for entrepreneurs is electronic filing via an interactive form available on the ČSSZ electronic portal. It is also possible to send the report by post to the address of the competent social welfare office. In theory, it is possible to use the box for receiving physical submissions, which is usually located at the entrance of the Social Welfare Office building. Most self-employed persons submit their reports to the Social Security Agency and the Social Security Office. The procedure is also similar for health insurance companies, which offer online self-service. For example, with VZP, it is possible to register on the VZP Point portal, complete the report online and submit it.
Insurance premiums in arrears for 2023 must be paid within eight days of receipt of the statement from the relevant institution. Again, this applies if the self-employed person hurries to fulfil the obligation in advance. Example: if the self-employed person waits until the last possible day, 2 June, to pay the premium, he must pay it by 10 June. However, if he rushes to submit the declaration on Friday 17 May, for example, he can pay the premium by the following Friday 24 May without incurring penalties. It is only if the declaration is submitted on the last day, or even if it is not submitted on time, that the eight-day deadline for payment starts from the due date. Therefore, latecomers cannot count on the eight-day grace period.
Beware of fines
The OSSZ, the District Social Security Administration, will first warn offenders of their non-compliance. However, if they do not respond, they can be fined heavily for non- or late submission. If the report is not delivered on time, the Social Security office will ask for compliance. Late delivery or failure to deliver the report may result in a fine of up to CZK 50,000. According to the law, the insurance company may punish the offender with a fine within two years from the date on which it became aware of the non-fulfilment or breach of the obligation and no later than five years from that date.
What happens with the new advances?
The minimum advance for social insurance for the main self-employed activity has increased to CZK 3,852 per month for 2024 (CZK 1,413 for secondary activities), while the minimum for health insurance has increased to CZK 2,968. The self-employed will also pay extra this year, as advances on health insurance will increase further. This increase is due to the increase in the average wage, which determines the amount of the advances. In addition, other changes were made as part of the government’s consolidation package, which raised the minimums more sharply than usual. The most significant adjustment is the increase in the so-called minimum assessment basis. Michal Dvořáček explains that until now it was equal to 25% of the minimum wage, but the government decided to increase it by 5% every year until 2026, to gradually raise it to 40% of the average wage. Already in 2024, the base will increase from 25% to 30 % and levies will increase proportionally. For health insurance, the new levy had to be paid as early as January and the new minimum deposit had to be paid by 8 February. For social insurance, on the other hand, the advance payments only change from the month following the month in which the declaration was or should have been submitted. For example, if the declaration is submitted in May, the payments increase from the June advance. An exception is the case where the declaration shows a lower advance payment than in the previous year: in this case, it is possible to pay the new amount from the month in which the declaration is submitted. The lower advance is paid by self-employed persons who start their activity in a given year or by those whose annual gross profit does not exceed 12 times the average monthly salary. Last year, the average salary was set at CZK 40,234. For 2024, it increased to CZK 43,967. Therefore, the annual gross profit of minimum wage earners must be less than CZK 527,604.
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