The change responds to the previous increase in levies, which was brought about by the consolidation package of the government of Petr Fiala (ODS). At that time, the minimum assessment base was increased to 40 percent of the average wage, and it is now to return to 35 percent.
Entrepreneurs could start paying lower deposits as early as June, depending on when the amendment is signed by the president and published in the collection of laws.
“Self-employed persons outside the lump-sum regime can submit an application to the territorially relevant social security administration for a refund of the overpayment at the end of the year, the money will be paid after the application is submitted,” the spokeswoman for the Ministry of Finance, Gabriela Krušinová, informed Fairpress.
As regards the flat tax regime, for roughly 125,000 people in the first band, the monthly levies will even drop by CZK 822.
Self-employed persons who are in the lump-sum regime can reduce their future advances immediately after the law on the difference of the overpayment has come into effect. “This will result in the return of the difference between the current and new amount of flat-rate advances as early as 2026. If they do not do so, they can request a Financial Report on the return of the resulting overpayment as part of the annual settlement,” the spokeswoman added.
However, lower contributions also mean lower pensions. The former Minister of Labor Marian Jurečka (KDU-ČSL) pointed this out earlier. However, the current minister Aleš Juchelka (ANO) claimed that the high levies were too much of a burden for many self-employed people and that the state must keep them in the system.
Some experts admit that helping low-income entrepreneurs makes sense. However, they point out that the current setup also favors those who have high incomes but show low costs.
“The relief is also aimed at middle-income and high-income entrepreneurs who use flat-rate expenses or a flat-rate tax,” pointed out PAQ Research economist Petr Vilím.
According to him, the state will lose 4.2 to 4.7 billion crowns a year by reducing levies. The shortfall is made up of lower insurance premiums for hundreds of thousands of self-employed people who file tax returns, as well as a drop in flat tax collection.
