What is Act No 540 / 2020 Coll.?

Act No. 540 / 2020 Coll., amending Act No. 586 / 1992 Coll., on Income Tax, as amended, and certain other laws relating to flat-rate taxation — Act amending Act No. 586 / 1992 Coll., on Income Tax, as amended, and certain other laws relating to flat-rate taxation.

When it became Act No 540 / 2020 Coll. effectiveness?

Act No 540 / 2020 Coll. became effective 01.01.2021.

Is Act No 540 / 2020 Coll. still valid?

Yes, Act No 540 / 2020 Coll. is still valid and effective.

How many times was it Act No 540 / 2020 Coll. amended?

Act No 540 / 2020 Coll. has 4 time versions of the text.

Act No 540 / 2020 Coll. - Act amending Act No. 586 / 1992 Coll., o...

540

THE LAW

of 1 December 2020

amending Act No. 586 / 1992 Coll., on Income Tax, as amended, and certain other laws relating to flat-rate taxation

Parliament has decided on this law of the Czech Republic:

ČÁST PRVNÍ

Amendment of the Income Tax Act

Čl. I

Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 2004, Act No. 5 / 1999, Act No. 5 / 2004, Act No. 5 / 1999, Act No. 5 / 2004, Act No. 5, Act No. 6 / 1999, Act No. 5, Act No. 5, Act No. 96, Act No. 5 / 1999, Act No. 96, Act No. 5, Act No. 96, Act No. 5, Act No. 5 / 2004, Act No. 5, Act No. 2004, Act No. 2004, Act No. 6, Act No. 2004, Act No. 2004, Act No. 1999, Act No. 2004, Act No. 2004, Act No. 5, Act No. 2004, Act No. 2004, No.

1. The following Section 2a is inserted after Section 2, including the title:

„§ 2a

Flat-rate fee

(1) From the first day of the applicable tax period, a flat-rate tax payer is a taxable person who:

(a) on the first day of the applicable tax period,

1. is a self-employed person under the law governing pension insurance covered by the legislation governing pension insurance;

2. is a self-employed person under a law governing public health insurance which is subject to legislation governing public health insurance and which is not exempt from the obligation to pay public health insurance premiums on account of long-term residence abroad;

3. is not a payer of value added tax and does not have a value added tax registration obligation, except in the case of an identified person,

4. is not a public company partner or an associate of a limited company; and

5. Is not a debtor against whom insolvency proceedings have been initiated,

(b) in the tax period immediately preceding the applicable tax period, there was no income from a separate activity exceeding CZK 1 000 000, unless:

1. exempt income,

2. non-taxable income,

3. the revenue on which the tax is levied by deduction at a specific tax rate;

(c) on the first day of the relevant tax period, it shall not carry out the activity on which the income from the dependent activity derives, with the exception of the income from which the tax is levied by means of a deduction at a specific tax rate; and

(d) notify the tax authorities of the entry into the flat-rate scheme and, at the latest on the last day of the deadline for the submission of the notification of entry into the flat-rate scheme, make a notification of the commencement of self-employment under the law governing the organisation and conduct of social security and of the notification of the commencement of self-employment under the law governing public health insurance; that period shall be maintained if, at the latest on the last day of that period, a submission is made containing the information required in the relevant notification to the tax authority together with the notification of entry into the flat-rate scheme or the trade office together with the declaration of trade or licence application.

(2) The tax payer on the income of natural persons who starts the activity on which the income from a separate activity arises shall be a taxpayer in a flat-rate scheme from the first day of the calendar month in which he commences such activity, provided that:

(a) meets the conditions laid down in paragraph 1, the conditions referred to in paragraph 1 (a) and (c) must be fulfilled instead of the first day of the relevant tax period at the date of commencement of the activity;

(b) in the part of the relevant tax period prior to the date on which the activity began, he was not a payer of value added tax, a shareholder of a public company or an associate of a limited company;

(c) in the part of the relevant tax period before the date on which the activity began

1. suspend the activity on which the revenue from the separate activity is derived and, for the duration of that activity during the tax period, has been a flat-rate taxpayer; or

2. has not carried out the activity on which the revenue from the separate activity derives,

(d) in the part of the relevant tax period prior to the date on which the activity began, it only had:

1. income from a separate activity not exceeding CZK 1 000 000, unless it is income according to points 2 to 4;

2. exempt income,

3. non-taxable income,

4. the revenue on which the tax is levied by means of a deduction at a specific tax rate;

5. income from capital assets, income from renting and other income, in so far as the income referred to in points 2 to 4 is not concerned and the total amount of such income does not exceed CZK 15 000.

(3) For the purposes of the flat-rate scheme:

(a) income means income under this law that a taxpayer would have had if he were not an entity;

(b) interest on deposits in an account which, according to the terms of the account-holder, is intended for the business of the taxpayer shall also be treated as income from a separate activity and shall not be treated as income from the share of a public company shareholder and an associate of a limited partnership.

(4) The taxpayer ceases to be a taxpayer in a flat-rate regime by default

(a) the tax period in which:

1. has revenue from a separate activity in excess of CZK 1 000 000, in so far as the income is not exempt, income not subject to tax and income from which the tax is levied by means of a deduction at a specific rate of tax,

2. Become a payer of value added tax or become a value added tax registration obligation, with the exception of an identified person's registration obligation;

3. Become a member of a public company or an associate of a limited company; or

4. The decision on the bankruptcy of the taxpayer has taken effect and the insolvency proceedings have not been completed,

(b) the tax period indicated by the taxpayer in the notice of voluntary withdrawal from the flat-rate scheme;

(c) the calendar month in which it ceases to be

1. a self-employed person under the pension insurance law covered by the pension insurance legislation; or

2. a self-employed person under a law governing public health insurance covered by public health insurance legislation;

(d) the calendar month immediately preceding the calendar month from which the taxpayer is not obliged to pay the public health insurance premiums on account of a long stay abroad; or

(e) the calendar month in which the taxpayer becomes a tax non-resident and ceases to carry out the activity on the territory of the Czech Republic resulting from income from a separate activity. "

2. In the first sentence of Article 7 (13), the words "and do not apply 'are replaced by the words" they do not apply' and the words "and whose tax for the tax period is not equal to the flat-rate tax 'are inserted after the heading" 7'.

3. Article 7a, including the title, reads:

„§ 7a

Flat-rate tax

(1) The taxpayer who is a taxpayer in a flat-rate scheme at the end of the tax period shall be equal to the flat-rate tax if that taxpayer in that tax period

(a) has only:

1. income from a separate activity not exceeding CZK 1 000 000, unless it is income according to points 2 to 4;

2. exempt income,

3. non-taxable income,

4. the revenue on which the tax is levied by deduction at the specific tax rate; and

5. income from capital assets, income from renting and other income, in so far as it is not income referred to in points 2 to 4 and where the total amount of such income does not exceed CZK 15 000,

(b) is not a payer of value added tax and does not have a value added tax registration obligation, with the exception of an identified person's registration obligation; and

(c) is not a member of a public company or an associate of a limited company.

(2) If the taxpayer has ceased to be a taxpayer in a flat-rate scheme before the end of the tax period on the ground that he has interrupted the activity from which the revenue from the separate activity arises, his tax for that tax period shall be equal to the flat-rate tax if the taxpayer:

(a) satisfies the conditions laid down in paragraph 1;

(b) in the part of that tax period after the date on which he ceased to be a taxpayer in a flat-rate scheme, he has not carried out the activity from which the revenue from the separate activity derives; and

(c) commence the activity from which the revenue from the separate activity is derived by the end of the period for filing the tax return for that tax period.

(3) For the purposes of paragraphs 1 and 2, a taxpayer who, in the last calendar month of the tax period, has died or ceased to operate on the basis of revenue from a separate activity shall be regarded as a taxpayer who has ceased to be a taxpayer in a flat-rate scheme before the end of that tax period.

(4) The tax shall not be equal to the flat-rate tax if the taxpayer referred to in paragraph 1 or 2, who is a tax resident of the Czech Republic, excludes double taxation of income generated from sources abroad in a tax return.

(5) The flat-rate tax is the sum of the tax advances which the taxpayer in the flat-rate scheme should have paid for the tax period in question.

(6) For the purposes of income tax, a flat-rate taxpayer shall be regarded as a taxpayer with income from a separate activity subject to tax, even if it is not generated by such income during the relevant period. ';

4. In Article 8 (1) (g), the words "pursuant to Article 7a 'are replaced by the words" a taxpayer whose tax is equal to a flat-rate tax'.

5. In Paragraph 13 (4) (c), "a 'is deleted.

6. In Paragraph 13, at the end of paragraph 4, the dot is replaced by "and 'and the following point (e) is added:

"(e) to and from a taxpayer whose tax is equal to a flat-rate tax.";

7. In Section 23 (8) of the final part of the provision, the words "or, when moving from a tax period in which their tax is not equal to a flat-rate tax, until the tax period in which their tax is equal to a flat-rate tax 'are inserted after the word" expenditure', and the words "the taxpayer considers that he is not late if 'are replaced by the words" the taxpayer looks as if he were not late if'.

8. In Paragraph 23, the following sentence is added at the end of paragraph 8: "In the transition from a tax period in which the taxpayer's tax is not equal to a flat-rate tax until the tax period in which his tax is equal to a flat-rate tax, the taxable amount shall be adjusted for the tax period in which his tax is not equal to a flat-rate tax; in that case, the taxpayer shall be regarded as not being late if he submits an additional tax return and pays the tax no later than the date on which he is obliged to submit the tax return for the tax period in which the tax is equal to the flat-rate tax. When the transfer from a tax period for which the taxpayer's tax is equal to the flat-rate tax, to the tax period in which the taxpayer keeps accounts or applies the expenditure referred to in Article 7 (7), the taxable amount shall be adjusted for the tax period in which the taxpayer keeps accounts or applies the expenses referred to in Article 7 (7) by the value of the claims which would be taxable income on payment, except for the claims referred to in Article 24 (2) (y), by the value of the debts which would be expenditure on attaining, securing and maintaining income, with the exception of advances received and paid, and the price of unused stocks; in the case of a change to tax records, the tax base shall not be adjusted. ';

9. In the second sentence of Article 26 (8), the words "or its tax is equal to a flat-rate tax 'shall be inserted after the words" the amount'.

10. In the last sentence of Paragraph 26 (8), the words "and in the tax period for which its tax is equal to the flat-rate tax shall be inserted after the word" amount. "

11. in Article 38a (2), at the end of point (c), the comma shall be replaced by a dot and point (d) shall be deleted;

12. The following Sections 38la to 38lq are inserted after Section 38l, including the headings:

„§ 38la

Management of standard public insurance premiums

(1) The administration of flat-rate public insurance premiums is subject to tax rules. Their administration is carried out by the Financial Administration of the Czech Republic.

(2) The special public health insurance account shall be considered as a public budget for the purposes of administering flat-rate public premiums and advances on public insurance.

(3) For the purposes of the flat-rate scheme, direct public premiums are:

(a) flat-rate pension insurance premiums, which, for the purposes of the flat-rate scheme, shall mean pension insurance premiums and a contribution to the State employment policy under the Social Security Insurance Act and a contribution to the State employment policy of a taxpayer whose tax is equal to a flat-rate tax; and

(b) flat-rate health insurance premiums which, for the purposes of the flat-rate scheme, refer to public health insurance premiums under the Act governing public health insurance premiums for a taxpayer whose tax is equal to a flat-rate tax.

§ 38lb

Registration of the taxpayer in the flat-rate scheme

(1) A taxable person who commences an activity on which income is derived from a separate activity and makes a notification of entry into the flat-rate scheme shall be required to submit an application for registration of the income of natural persons at the latest on the last day of the period for the submission of a notification of entry into the flat-rate scheme.

(2) The period referred to in paragraph 1 shall be maintained if, at the latest on the last day of the period, a submission is made to the trade office containing the information required in the application for registration for the income tax of natural persons together with the declaration of trade or licence application.

§ 38lc

Notification of entry into the flat-rate scheme

(1) A notification of entry into the flat-rate scheme may be submitted by a natural persons income tax payer to the tax administrator by the 10th day of the applicable tax period.

(2) The tax payer who starts the activity on which the income from a separate activity is derived, after the tenth day of the relevant tax period, may submit a notification of entry into the flat-rate scheme to the tax administrator by the date of commencement of that activity.

(3) The notification of entry into the flat-rate scheme may only be lodged:

(a) on a form issued by the Ministry of Finance,

(b) on a printing output from a computer printer having data, content and layout identical to the form referred to in (a); or

(c) a data message using remote access in the format and structure published by the tax administrator, made electronically in accordance with the tax rules.

(4) In the notification of entry into the flat-rate scheme, the taxpayer shall indicate, in addition to the general requirements of the submission:

(a) their identification and contact details;

(b) details of entry into the flat-rate scheme;

(c) the information on the taxpayer's pension insurance; and

(d) information on the public health insurance of the taxpayer.

(5) The notification of entry into the flat-rate scheme after the period referred to in paragraph 1 or 2 shall be ineffective. This period cannot be refunded in the previous situation.

(6) The period referred to in paragraph 1 or 2 shall be maintained if, at the latest on the last day of that period, a submission is made to the trade office containing the information required in the notice of entry into the flat-rate scheme together with the declaration of trade or licence applications.

§ 38ld

Joint notification

(1) The tax payer may, together with the notification of entry into the flat-rate scheme, make submissions to the tax administrator containing the information required in the notification of the start of self-employment under the law governing the organisation and conduct of social security or in the notification of the start of self-employment under the law governing public health insurance or the entry into sickness insurance under the law governing sickness insurance.

(2) Submission pursuant to paragraph 1 may only be made in accordance with Paragraph 38lc (3).

(3) The tax administrator shall, within 5 working days of the date on which the taxpayer made the submission referred to in paragraph 1, transmit in electronic form the information referred to in paragraph 1 to the competent district social security administration or to the registry administrator of all public health insurance insurers.

(4) The transmission of the data referred to in paragraph 3 shall be treated as a notification of the start of self-employment under the law governing the organisation and conduct of social security, the notification of the start of self-employment under the law governing public health insurance or sickness insurance applications under the law governing sickness insurance made by the taxpayer.

§ 38le

Notification of voluntary withdrawal from the flat-rate scheme

(1) A notice of voluntary withdrawal from the flat-rate scheme may be submitted by the taxpayer under the flat-rate scheme to the tax administrator by the tenth day of the tax period immediately following the tax period, the end of which shall cease to be a flat-rate taxpayer.

(2) In the notice of voluntary withdrawal from the flat-rate scheme, the taxpayer shall indicate the period of taxation which shall cease to be a flat-rate scheme.

(3) The notification of voluntary withdrawal from the flat-rate scheme submitted after the period referred to in paragraph 1 shall be ineffective.

§ 38lf

Notification of non-compliance with the conditions for entry into the flat-rate scheme

(1) Where a natural person's income tax payer who has notified a flat-rate scheme that he did not fulfil the conditions under which the taxpayer becomes a flat-rate scheme, he shall notify the tax administrator of this fact, including the reason for which he did not fulfil the conditions, within 15 days of the date on which he found that fact.

(2) If the tax administrator finds that a natural person's income tax payer who has notified a flat-rate scheme did not fulfil the conditions under which the taxpayer becomes a flat-rate scheme, he shall make an official record of that finding and inform the taxpayer accordingly of that finding, including the reason for which he did not fulfil the conditions and the consequences of not becoming a flat-rate taxpayer.

§ 38lg

Notification of termination of the flat-rate scheme

(1) If it has been established that the taxpayer ceases to be a taxpayer in a flat-rate scheme, the taxpayer shall notify the tax administrator of that fact within 15 days of the date on which that fact occurred.

(2) If the tax administrator finds that there is a fact that the taxpayer ceases to be a taxpayer in a flat-rate scheme, he shall make an official record of that finding and inform the taxpayer accordingly of that fact and of the consequences of the taxpayer being no longer a taxpayer in a flat-rate scheme.

§ 38lh

Tax return for flat-rate tax

(1) A taxpayer whose tax is equal to a flat-rate tax is regarded as having submitted a tax return on the last day of the deadline for submitting the tax return, in which he claims a flat-rate tax. Neither the tax return submitted nor the additional tax return shall be taken into account.

(2) A flat-rate taxpayer does not submit a return on account of insolvency proceedings.

§ 38li

Maturity of flat-rate public insurance premiums

The flat-rate public premium shall be payable on the last day of the period for the submission of the tax return on the income of the taxpayer whose tax is equal to the flat-rate tax.

§ 38lj

Measurement of flat-rate tax and flat-rate public premiums

(1) A tax equal to the flat-rate tax and the flat-rate public policy shall be deemed to have been assessed as having expired on the last day of the period for submitting the tax return on the income of the taxable person whose tax is equal to the flat-rate tax.

(2) The tax and the flat-rate public premium calculated in accordance with paragraph 1 shall be prescribed by the tax administrator in the tax records.

§ 38lk

Flat-rate advances

(1) The flat-rate payer pays flat-rate advances for the advance period. The advance period shall be a calendar month for the purposes of the flat-rate scheme.

(2) The flat-rate advance includes:

(a) advance payment of the taxpayer in the flat-rate income tax scheme;

(b) an advance on pension insurance premiums, which, for the purposes of the flat-rate scheme, means the advance on the taxpayer under the flat-rate scheme for pension insurance premiums and the contribution to the State employment policy under the Social Security Insurance Act and the contribution to the State employment policy; and

(c) an advance on health insurance premiums which, for the purposes of the flat-rate scheme, means an advance on the taxpayer in the flat-rate scheme on public health insurance premiums under the Act governing public health insurance premiums.

(3) The advance on public premiums, which, for the purposes of the flat-rate scheme, means the advance on pension insurance and the advance on health insurance, is managed as a tax under the tax rules. Its administration is carried out by the Financial Administration of the Czech Republic.

(4) The flat-rate advances shall be paid from the advance period in which the taxpayer became a flat-rate payer to the advance period in which the taxpayer ceased to be a flat-rate payer.

(5) The flat-rate advance shall be payable up to the 20th day of the advance period for which the advance is payable. The advance payment for the advance period in which the flat-rate debtor has started the activity from which the revenue from the separate activity is derived shall be due up to the 20th day of the advance period immediately following that advance period.

(6) The flat-rate advance is payable on a common personal tax account.

(7) The advance payment of the taxpayer in the flat-rate income tax scheme is CZK 100.

(8) The tax administrator may not provide for any other amount of the flat-rate advance or allow an exemption from the obligation to advance tax; This shall be without prejudice to the possibility of authorising the payment of a flat-rate advance or the distribution of its remuneration into instalments.

§ 38ll

Common personal tax account

(1) A common personal tax account is a personal tax account which is maintained for flat-rate advances, a tax equal to the flat-rate tax, and a flat-rate public policy.

(2) On the debit side of the Common Personal Tax Account, regulations and depreciation shall be recorded separately for tax and for individual public insurance premiums.

(3) Reimbursement to a common personal tax account shall be used in the case of tax claims due with the same maturity date to cover such claims in proportion to their amount.

§ 38lm

Overcharge

(1) The excess charge on a common personal tax account shall not apply to the payment of the arrears of the same taxpayer in another personal tax account or to the arrears registered with another tax administrator; that does not apply if the taxpayer

(a) request such use of the overpayment;

(b) no longer be a taxpayer in a flat-rate scheme; or

(c) does not meet the conditions under which a taxpayer becomes a taxpayer under a flat-rate scheme.

(2) If the taxpayer did not fulfil the conditions under which the taxpayer will become a taxpayer in a flat-rate scheme, the overpayment on the common personal tax account will cease at the level of the payments that have been transferred to the central account of the Czech Social Security Administration and to the special public health insurance account.

(3) If the taxpayer does not request the refund of a refundable overpayment in a common personal tax account within 6 years of the end of the year in which the overpayment was incurred, the excess shall cease and become income

(a) a special public health insurance account in part determined according to the proportion of the amount of the sickness insurance advance to the amount of the flat-rate advance; and

(b) the State budget in the part of the surplus remaining after its reduction by the part referred to in (a).

§ 38ln

Repayment of advances on public premiums

The supplement to the advances on public insurance due during a tax period for which the taxpayer's tax is not equal to the flat-rate tax, with the exception of accessories, shall expire on the last day of the period for the submission of the personal income tax return for that period.

§ 38lo

Transfer of flat-rate premiums

(1) The tax administrator transfers the advance payment of pension insurance and flat-rate pension insurance into the central account of the Czech Social Security Administration.

(2) The tax administrator transfers the advance payment of health insurance premiums and flat-rate health insurance premiums to a special public health insurance account.

(3) The tax administrator shall transfer the revenue referred to in paragraphs 1 and 2 in the manner laid down by law governing the budgetary determination of taxes for the transfer of tax revenue.

§ 38lp

Provision of information by the tax administrator

The tax administrator shall provide the social security authorities and administrators of the register of all public health insurers with information on:

(a) taxpayers under the flat-rate scheme necessary for the implementation of pension and public health insurance; and

(b) payment of flat-rate public premiums and advances under the flat-rate scheme necessary for the performance of pension and public health insurance.

§ 38lq

Provision of information by social security authorities and by the registry administrator of all public health insurance insured persons

The social security authorities and the registry administrator of all public health insurers shall provide the tax authorities with information on self-employed persons for the purposes of the flat-rate scheme. ';

Čl. II

Transitional provisions

1. For taxes on income taxes for the tax period started before the date of entry into force of this Act and for the rights and obligations related thereto, Act No. 586 / 1992 Coll., as effective before the date of entry into force of this Act, shall apply.

2. The taxpayer in the flat-rate scheme is not a taxpayer who has a tax fixed by a flat-rate amount under Section 7a of Act No. 586 / 1992 Coll., as effective before the date of entry into force of this Act.

3. For a taxpayer who has a tax liability for the tax period starting from the date of entry into force of this Act a flat-rate amount pursuant to § 7a of Act No. 586 / 1992 Coll., as effective before the date of entry into force of this Act, § 7a and § 38a (2) of Act No. 586 / 1992 Coll., as effective before the date of entry into force of this Act, shall apply.

4. A flat-rate advance for the advance period, which is the first calendar month of the first tax period starting from the date of entry into force of this Act, shall be payable by the 20th day of the advance period immediately following that advance period.

5. For the purposes of Act No. 159 / 2020 Coll., as amended, a limited liability company is also considered to be a tax resident of the Czech Republic if it is a tax resident of another Member State of the European Union or of the European Economic Area and that company or its partner has not received aid in one of these States similar to the compensation bonus under Act No. 159 / 2020 Coll. If, as a result of this, a compensation bonus entity is entitled to a compensation bonus pursuant to Act No. 159 / 2020 Coll., as amended, the deadline for applying for the compensation bonus shall resume as from the date of entry into force of this provision.

ČÁST DRUHÁ

Amendment of the Trade Act

Citation	Act No. 540 / 2020 Coll., amending Act No. 586 / 1992 Coll., on Income Tax, as amended, and certain other laws relating to flat-rate taxation
Regulation Type	Law
Author	-
Collection	Code of Laws

Date of Promulgation	18.12.2020
Effective from	01.01.2021
Effective until	-
Status	Valid

Act No 540 / 2020 Coll.

Act amending Act No. 586 / 1992 Coll., on Income Tax, as amended, and certain other laws relating to flat-rate taxation

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