Overall burden of self-employed today and tomorrow SME Conference Tbilisi, 4-6 May

1. Overall burden of self-employed today and tomorrowSME Conference Tbilisi, 4-6 May Ladislav Mincic Ministry of Finance of the Czech Republic

2. Content 1. Current Tax System 2. Tax Reform 2013 3. Statistics 4. Tax Administration

3. 1. Current Tax System • Personal Income Tax – comprehensive taxation • Tax base includes: • income from dependent activity (wages, salaries), • income from business activity, • rental income, • other types of income. • Exception: • capital income (interests, dividends), • withheld at source.

4. 1. Current Tax System • Business activity includes • trade, • agriculture and forestry, • other business activity, • the use or provision of industrial or other intellectual property. • Expenses can be deducted • as actual amounts, • as lump-sum

5. 1. Current Tax System • Development of rate of lump-sum expenses

6. 1. Current Tax System • Tax rates • personal income tax: 15 %, • public health insurance: 13.5 %, • pension insurance: 29.2 %, • the base for calculation of insurance is 50 % of profit • effective rates of insurance are thus 6.75 % and 14.6 %

7. 2. Tax Reform 2013 • Single Revenue Authority • currently, insurance is collected by • social security administrations, • health insurance companies, • as of 2013 both levies will be collected by the tax offices. • Harmonization of bases of personal income tax, social security insurance, and health insurance • simplification of the current system • decrease of administrative and compliance costs

8. 2. Tax Reform 2013 • Tax rates • personal income tax: 19 %, • public health insurance: 6.5 %, • pension insurance: 6.5 %, • the base for calculation of insurance will be 100 % of profit

9. 2. Tax Reform 2013

10. 2. Tax Reform 2013

11. 2. Tax Reform 2013

12. 2. Tax Reform 2013 • Decrease of a threshold for mandatory VAT registration • currently CZK 1 mio • as of 2013: CZK 750,000

13. 3. Statistics • Persons and companies not registered to VAT

14. 3. Statistics

15. 3. Statistics

16. 3. Statistics

17. 4. Tax Administration • Information source for the public • http://cds.mfcr.cz • Newsletter of the Czech Tax Administration – service for the clients since March 2009 – taxation newsby e-mails • Electronic services for clients – Tax Portal • provides for the possibility of tax forms electronic submission

18. 4. Tax Administration • The introduction of the Tax Portal - October 2006 • Till the end of 2009 - > 24000 applicants for opening the Tax Information Box - monitoring the status and turnover of the personal tax account - an overview of relevant documents - a personal tax calendar showing deadlines for tax compliance • Tax Portal – enables tax forms electronic submission • The number of electronic submissions steadily grows - in 2009 - 32% increase in comparison to 2008, the absolute number of el.submissions in 2009 – 263000

19. 4. Tax Administration • Tax returns submissions possibilities - electronically - in written form - via an interactive form • Tax educational activities - seminars - individual assistance at local offices - technical questions answering

20. Thank you for your attention. ladislav.mincic@mfcr.cz