Tax and Finance Guidance – Účetní na 1

How to fill in the VAT registration form for an identified person in the Czech Republic for a Bolt/Uber driver

admin — Sat, 20 Apr 2024 20:54:51 +0000

In today’s article, we will focus on the process of registering as an Identified Person (IP) in the Czech Republic for Bolt/Uber drivers.

Why do I have to become an identified person?

First, it is important to understand what it means to be an identified person. Under Czech law, all persons purchasing services from a foreign entity must register as an identified person. Since both Bolt and Uber are not Czech entities, but foreign entities (note the information on the invoice), they will invoice you for the use of their services without VAT under the reverse charge regime. It is your responsibility to register as an identified person and then pay 21% of the invoiced amount to the tax office, their commission.

What do I need to register as an identified person?

This is where the process for new Uber and Bolt drivers differs. Uber drivers must register as an identified person before their first ride. Bolt drivers can start driving without registering and use their first Bolt invoice to register.

Procedure

1. Open the form: https://adisspr.mfcr.cz/dpr/adis/idpr_epo/epo2/form/form_uvod.faces?CPodani=Drrd4pXY5xX5L7QK0t93wjxs

2. Tax ID number: CZ(birth number) or for foreigners CZ(registration number under which you are registered by the tax office)

3. Type of tax entity.

4. Type of registration.

5. Reason for registration under a specific provision of the VAT Act

§ 6l – voluntary registration of an ID person (the date of the decisive date for the obligation of statutory registration is not entered in the application form) – most often for UBER, because UBER requires confirmation of registration as an ident. Person before registering as an UBER driver
§ 6h – Id. registration. person who has already received a transaction from a foreign entity (the application form refers to the date on the Bolt invoice as the effective date for the statutory registration obligation) – most commonly for Bolt because UBER requires confirmation of registration as an ident. Person before UBER driver registration

6. Reason for voluntary registration (text field)

“I want to become a driver for the UBER/Bolt service.”

7. Bank account – add your bank account

8. Attachments – Add e-attachment

As an attachment, you can include an invoice received from Bolt showing the commission charged (if you selected Section 6h as the reason in step 5)

9. Error Log – Click on “Error Log” so that the form itself will tell you which fields need to be completed. Once the log is error free, the form can be submitted.

10. Submit the document – as a final step, send the document via data mail.

Otázky a odpovědi

On what price is the DHP calculated?

Let’s see an example:

A driver earns 30 000 CZK (fare) by driving.

The fee (commission) that Bolt automatically deducts (25%) is CZK 7 500.

The driver files a VAT return and pays 21% of the fee (commission), i.e. CZK 1,575.

Can someone else do the registration for me?

The process of registering as an identified person can seem complicated at first, so we will be happy to help you register and complete your tax returns. We offer registration for CZK 1 000 and VAT returns for CZK 500.

How to maximize earnings and minimize taxes: what you should know about invoicing in the Czech Republic

admin — Sat, 20 Apr 2024 20:07:46 +0000

In the Czech Republic, there is a happy medium for many entrepreneurs, where they want to invoice the amount that will ensure the lowest possible social security contributions. Do you know what that amount is?

If you’re a sole trader, you’ll be familiar with the term “minimum social insurance contributions”. For many, it’s a key item that can significantly affect monthly cashflow and overall business profitability.

Maximum invoiced amount 560 000 CZK

In 2023, the magic number to keep in mind is £560,000. This means that if you invoice amounts up to this threshold during the year, you can achieve the lowest possible social security contributions. Of course, this doesn’t mean you can’t invoice more, but if you want to minimise your contributions it’s a good number to keep in mind.

Why is this threshold important?

Social Security is made up of several parts, and the amount you pay varies depending on your income. With a lower income, you may qualify for reduced contributions, which can significantly reduce your monthly costs. On the other hand, if you exceed a certain threshold, your contributions may increase.

In conclusion

Whether you’re a start-up entrepreneur or have several years in the business, it’s important to know your options to optimize your cash flow and minimize your costs. £560,000 is the amount you should keep in mind in 2023 if you want to minimize your social security contributions.

If you have further questions or need a consultation about your business, please do not hesitate to contact us. The Accountants on 1 Ltd. team is here for you!

Note: We always recommend consulting with your accountant or tax advisor to ensure you have up-to-date and accurate information specific to your situation.

Minimum advance payments for self-employed persons in 2024 – social and health insurance

admin — Sat, 20 Apr 2024 19:57:03 +0000

Calculation of the monthly assessment base for social insurance for self-employed persons

To calculate the monthly assessment base, you first need to know the tax base of the self-employed person, which can easily be calculated as the difference between income and expenses for 2023 (gross annual profit). Until 2023 the annual assessment base was set at 50% of the tax base, from 2024 it is 55%. The monthly assessment base is then one-twelfth of the annual assessment base. If the calculated assessment base is higher than the minimum assessment base, the social security contribution is 29.2% of the calculated assessment base.

Minimum social security contributions for self-employed persons in 2024

For the main activity: CZK 3 852
For secondary activities: CZK 1 413
The social insurance advance is due by the end of the month for which the advance is paid.

Minimum health insurance advances for self-employed persons in 2024

The calculation of health insurance for self-employed persons remains unchanged. The amount of the assessment base and the minimum assessment base remain unchanged, which means that health insurance advances will only increase if the average wage increases. Monthly advances for next year will be calculated on the basis of the previous year’s income and will amount to 13.5% of the assessment base (50% of the tax base). If this calculated advance is lower than the minimum advance, the self-employed pay the minimum advance.

The minimum advance payment for health insurance is 13.5% of half of the average wage. This means:

For the main activity: 2 968 CZK
For secondary activities: self-employed persons carrying out secondary activities do not pay any advance payments, and any insurance premiums are calculated on the basis of actual income.
The due date for payment of the advance payment for health insurance is the 8th day of the following month. The new advance payment amounts apply from the beginning of 2024, so the first increased advance payment for January 2024 is due by 8 February 2024.

Minimum flat-rate tax for self-employed persons in 2024

The monthly flat-rate tax in 2024 is:

Band 1: CZK 7 498 (min. health. CZK 2,968, social insurance: CZK 4,430, income tax: CZK 100)
Band 2: CZK 16 745
Band 3: CZK 27 139

Entry into the flat-rate scheme is voluntary and can be applied for until 10 January 2024 at the latest.