National regimes

Flat tax (pausalni dan, Czechia)

Regime specific to Czechia

The Czech flat tax for sole traders: one monthly payment that covers income tax, pension and health insurance, in three bands by revenue.

What Flat tax (pausalni dan, Czechia) means

Pausalni dan is a voluntary regime for Czech sole traders who are not VAT payers and whose annual revenue stays under the statutory ceiling. Instead of filing an income tax return and two insurance overviews, the trader pays a single fixed amount every month to the tax office, which distributes it to the pension and health insurance systems. The amount depends on one of three bands set by revenue and by the type of activity.

Entry is by notification in January or at the start of the business, and the regime runs for the whole calendar year. It cannot be combined with employment income above a small limit or with significant capital or rental income, and no tax credits or deductions apply. It pays off for traders with low expenses and no dependants to claim for; a trader with high real costs or a spouse allowance is often better off with the standard return. Kontevia tracks revenue against the band limits and the monthly payment date.

This is a national regime of Czechia. Other EU countries have their own equivalents; see small business scheme and flat-rate scheme.

Related terms

Flat-rate schemeA simplified tax regime where tax is calculated as a percentage of turnover or a fixed amount, instead of from actual profit or VAT records.Sole trader (self-employed)An individual running a business in their own name with unlimited liability. The simplest legal form, taxed under personal income tax.Social security contributionsMandatory payments for pension, health and other insurance schemes, paid by employers, employees and the self-employed under national rules.Personal income taxThe tax individuals, including sole traders, pay on their income. Business profit is taxed together with other income under national progressive or flat rates.

This entry is general information, not tax advice. Rules change; check the current position with your adviser or the tax authority of your country.

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