In a recent decision by the coalition council in Czechia, small entrepreneurs will be given the option to either adhere to electronic registration of sales (EET) or continue to pay a flat tax, as announced by Tomio Okamura, the Speaker of the Chamber of Deputies. This regulation is part of a proposed law that Finance Minister Alena Schillerová is preparing, aiming to simplify the process for small business owners, rather than adding to their bureaucratic burdens. The new EET system is set to become operational next year, further impacting the operational framework for these entrepreneurs.

The newly proposed choice aims to accommodate a wider range of small business operators, especially shifting the limit such that it includes not just casual entrepreneurs but also those for whom business is their main source of income. According to Okamura, this flexibility intends to ensure that small entrepreneurs have an alternative that suits their circumstances. The thresholds for opting out of EET are designed to ensure that only those whose annual income remains below a specific level can benefit from the flat tax option, thus simplifying the tax obligations for smaller enterprises.

Currently, the flat tax can be utilized by small business operators who are not VAT payers and whose annual income does not exceed two million Czech korunas. The tax is structured in three graduated bands based primarily on the level of income, providing a tiered approach to tax payments. The legislation is poised to have considerable implications for the small business landscape in Czechia as it attempts to balance regulatory oversight with the operational realities faced by these entrepreneurs.