Are you standing at the threshold of the year and the question in your head is: to stay with tax records or to switch to a lump sum? One step promises you the peace of mind of one monthly payment and less paperwork. The other offers flexibility when bigger expenses, investments or seasonal downturns come up. In the meantime, limits, bands and the inexorable January 12 date are running.
In this article, we provide a comparison of tax registration and flat tax for 2026, including entry requirements, current bands and fixed dates. We also provide clear examples of when it is worth switching to a flat rate and when to opt out, a practical approach for both, and an explanation of the one-off adjustment to the tax base when you switch.
Tax records are a way of keeping track of your business income and expenditure, assets and debts. It is used to determine the tax base and the resulting income tax. In practice, a self-employed person keeps records of cash income and expenditure, assets and debts so that the tax base can be correctly determined.
In the traditional scheme , you choose the method of claiming expenses:
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
The flat-rate tax (lump-sum scheme) is a voluntary scheme for self-employed persons who meet the statutory conditions. You pay one monthly amount and, as long as you comply with all the conditions, you do not file tax returns or statements. At the same time, you keep only limited records – mainly simple records of income, debts and tangible assets to prove that you meet the conditions of the scheme and any statutory adjustments.
For 2026, the monthly amounts are set as follows:
Be careful of terminology: In Czech, the word “lump sum” is used ambiguously. “Flat-rate expenses” means percentage expenses in the classic regime (with tax records and returns). “Flat tax” is a special regime – you pay a monthly package (tax + social + health) and under the conditions you do not file returns or reports.
Let’s take a look at the main differences between the two systems:
Under the traditional system , you choose how to claim expenses: either actual (based on receipts, depreciation, etc.) or a flat rate expense based on a percentage of income, but you always file returns and reports.
In the flat-rate scheme, you do not choose any expenses and the tax calculations are not addressed: you pay a fixed package according to the band.
Anyone can choose the classic scheme: you can be a VAT payer and have any income structure. You simply keep records and file returns and reports.
A self-employed person who is a VAT payer cannot enter the flat-rate tax. Furthermore, the structure and amount of income is monitored, and if certain thresholds are exceeded, the corresponding band is chosen (which will determine the monthly amount), while the total income ceiling for the scheme itself is 2 million. The ceiling for the scheme is set at CZK 1,000 per year.
There is no deadline for filing or amending under the classic scheme – you simply meet the normal deadlines for returns and statements.
On the other hand, there is a hard deadline of 10 January of the year for signing up to the flat rate tax (for 2026, this deadline is 12 January due to the weekend), or until the start date for newcomers. You also always have to notify a change of band by 10 January of the following year and you cannot change your band during the year.
In traditional tax accounting, both the advance and the additional payment are based on the result, so you don’t know the total annual burden until after the closing date.
In contrast, a flat tax gives you a predictable monthly outlay: the amount is fixed, whether you do more or less (subject to conditions, of course).
The tax registration scheme means a full administration package: tax returns, reports and the actual keeping of records.
The flat-rate tax minimises record-keeping and forms: if you keep the conditions for the whole year, you don’t file returns or summaries and only worry about notifications of entry and any notifications of changes.
Even if you have a flat tax, sometimes you can’t avoid the paperwork. Find out when you need to file a flat-rate tax return.
A self-employed person who is not a VAT payer(an identified person does not matter), who is not a partner in a limited liability company/complementary company, who does not have active employment (wages), or who has only income taxed by withholding, and who has not exceeded the qualifying income for the chosen band, may apply for the flat-rate tax.
Notification of entry into the flat-rate regime must be submitted by 10 January of the year in question (for 2026, 12 January 2026 applies). An exception is self-employed persons starting their activity during the year – they can submit a notification by the date of commencement of their activity and become a flat-rate taxpayer from the beginning of the month of commencement.
The notification can be easily submitted electronically via the MOJE daně portal, by data box, or in person or by post.
The mandatory switch to tax registration occurs when you no longer meet the statutory conditions for a flat-rate tax. Typically, the annual limit of 2 million euros is exceeded. CZK, becoming a VAT payer or other legal exclusions (e.g. status of a partner in a limited liability company or general partner in a limited partnership).
At that point you cease to be a taxpayer in the flat-rate regime and fall back into the classic regime with tax registration and annual returns. In addition, you must notify the tax authorities of this fact within 15 days.
In practice, this means that from the moment you break the conditions, the flat-rate scheme no longer applies and you will file a tax return for the year (as well as reports to the Social Security and Health Insurance Institutions). If the non-compliance occurs during the year, the scheme will normally be administratively brought to the end of the tax year and the settlement will only take place in the return.
A special category is exceeding the limit for the chosen band but below the 2 million threshold. CZK. In this case, the flat-rate scheme does not end, you only have to declare a different (higher) flat-rate tax amount and pay the difference to the correct band by 10 January of the following year (for 2026, 12 January 2026). However, if you would have exceeded 2 million. CZK, the flat-rate scheme will cease and you will return to the classic mandatory return.
A common practical trigger for a compulsory switch is the emergence of VAT payership. The flat-rate scheme does not allow you to be a VAT payer (the only exception is an identified person, which is not payership). Once you become a taxable person, for whatever reason, the flat-rate scheme ends and you move to the regular scheme.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
If you wish to leave the flat-rate scheme voluntarily, you must notify your voluntary withdrawal no later than 10 January of the following year (for 2026, 12 January 2026). The notification must be made electronically (if you have a data box by law), or by post or in person. Once you have voluntarily opted out, you return to the normal regime and file your tax return and statements for that year .
When you change your method of taxation (whether you go in or out of the flat tax), the law requires a technical adjustment to your tax base for the previous tax year. The purpose is to ensure that something is not taxed twice or, conversely, remains untaxed just because of a change in regime.
Therefore, when you switch to or return from a flat tax to a classic tax, you must make a one-time adjustment to the tax base in the last tax year (before the change). In practice, you look at the position as at 31 December before the change and consider in particular outstanding receivables, unconsumed inventories, advances received and issued and liabilities.
The logic is simple: items that would no longer be taxable under the new regime (typically accounts receivable and inventories when going to a flat tax) increase the tax base of the last year, while liabilities decrease the base.
Imagine that in 2025 you keep tax records with actual expenses. As of 31 December 2025, you have receivables of CZK 80 000 and inventories of CZK 40 000, as well as liabilities of CZK 20 000 for services already supplied. From 1 January 2026 you will enter the flat-rate tax in band I. Before the transition , you will increase your tax base for 2025 by receivables + inventories (CZK 120,000) and reduce it by liabilities (CZK 20,000). This prevents the income from these receivables from being taxed a second time in the flat-rate regime (where it would no longer be included in the tax) and, conversely, prevents you from escaping costs.
It should be remembered that the adjustment may also have an impact on insurance premiums. If the top-up increases the tax base of the last year, this can retrospectively change the assessment base for social insurance, and you then file an amended statement with the CSSA. Health insurance is based on the difference between income and expenditure, so you don’t have to deal with anything here.
Yes. The tax records keep track of income and expenses in both cash and non-cash forms. You quantify the barter or in-kind transaction at its normal cost and reflect it in the tax base at the time it takes place.
Yes, but only if the income is subject to withholding (typically agreements up to the limit). Earned income that would lead you to make a compulsory return breaks the regime – then you can’t be in the flat-rate regime.
The administrator will recalculate them against your actual tax and insurance liability in the classic scheme (after the end of the year in which the lump sum ceased).
Returning to returns and reports (CSRS, health), setting up advances and a one-time adjustment of the tax base for the last “transition” year.
If you’re considering which mode will give you more music for less money and hassle, it’s worth looking at how both models behave in normal operation:
Benefits
Disadvantages
Advantages
Disadvantages
If you are considering switching from tax registration to a flat-rate tax, you should mainly look at three factors: the amount and stability of your income, the costliness of the business and whether you meet the entry conditions for the flat-rate tax in 2026.
Typically, when you have a stable and rather lower income, low real costs and at the same time meet the conditions. This is often the case for sole traders and craftspeople who would rely on a flat rate expense rather than high actual costs under the traditional regime.
This is because in a lump sum you don’t address the choice of expenses – instead of an annual tax calculation, you pay a fixed monthly amount by band, and this works best especially in Band I where the monthly burden is lowest. This allows you to plan your income and expenses better and keeps administration to a minimum: you set up a standing order, keep an eye on limits and reporting requirements.
If you are, or are likely to soon become, a VAT payer, you can’t opt for a flat rate – the only exception is for an identified person, which is not a taxpayer. At the same time, the classic scheme makes more sense if you have higher or fluctuating costs (materials, subcontracting, investments) that you want to claim.
It makes sense to stay even if your income balances around 2 million. The flat-rate scheme would disappear and you would end up with annual returns and reports anyway, plus a reporting obligation to the tax authorities.
It’s a good idea to create two simple scenarios when making your decision: In the first, you calculate how much the flat-rate tax will cost you in 2026 in the relevant band. In the second, you work out the real costs of the industry and see whether an 80/60/40/30% flat rate or actual expenditure would make more sense for you in a classic situation .
Tax registration means the classic scheme with actual expenses or expenses at a flat rate (30-80%), always with a tax return and reports to the Social Security and Health Insurance Institutions. Flat-rate tax, on the other hand, is a voluntary scheme with one monthly payment without returns and reports, but with stricter conditions: you must not be a VAT payer, the limits and income structure are monitored, the band cannot be changed during the year, and the scheme is entered/reported by 10 January of the following year (for 2026 it is 12 January 2026). If the conditions are not fulfilled (e.g. becoming a VAT payer or exceeding CZK 2 million), the flat-rate scheme ceases and you return to the classic scheme. Transitions between regimes require a technical adjustment of the tax base (receivables, inventories, liabilities) in the last year before the change.
The flat tax makes sense especially for stable and rather lower incomes and low real costs. The classic regime is more suitable for VAT payers, industries with higher or fluctuating costs, investments and where there is a risk of exceeding CZK 2 million. CZK. You can sign up for the flat-rate scheme by using the EPO form via MY Taxes (or by data box) until 12 January 2026. Voluntary withdrawal is announced on the same date in the following year.
You can find the Notice of Entry into the Flat Rate Scheme form as an EPO form in the MY Taxes portal or as a downloadable paper form.
You do not change the band during the year. However, after the end of the year, you can declare a different flat rate by 10 January. This does not apply if you have exceeded 2 million. CZK – in that case the flat-rate scheme ends.
You do not file reports in the flat tax. You always file them in the classic mode.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
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