If you have been employed in a permanent or part-time position and your employer has paid tax advances on your behalf and your employment relationship continues, request your employer to perform an annual settlement of income tax advances for individuals. Since the employer paid the so-called tax advance, it may happen that taxes were paid on your behalf even though your income was below the taxable minimum. In this case, you are entitled to a refund.
2. Deadlines for Filing Tax Returns
The tax return is filed within three calendar months after the end of the tax period (calendar year). The basic deadline for filing the tax return for the year 2015 is by March 31, 2016.
Possibility of Extension
A taxpayer who is required to file a tax return after the end of the tax period within the deadline according to § 49 paragraph 2 of the Income Tax Act, based on a notification submitted to the relevant tax administrator before the expiration of the deadline for filing the tax return according to § 49 paragraph 2, this deadline is extended by a maximum of three full calendar months (except for a taxpayer in bankruptcy or liquidation); the taxpayer shall indicate in the notification the new deadline, which is the end of the calendar month in which the tax return will be filed, and within this new deadline, the tax is also payable. If the notification is submitted to the relevant tax administrator before the expiration of the deadline for filing the tax return according to § 49 paragraph 2, this deadline is extended by a maximum of six full calendar months if part of the taxpayer's income includes taxable income from foreign sources (except for a taxpayer in bankruptcy or liquidation); the taxpayer shall indicate this fact and the new deadline, which is the end of the calendar month in which the tax return will be filed, and within this new deadline, the tax is also payable. If the taxpayer does not indicate income from foreign sources in the submitted tax return, the tax administrator will apply the procedure according to a special regulation.
3. What does the tax base mean for a sole proprietor?
A taxpayer receiving income from both self-employment and other types of income determines their tax base as the sum of partial tax bases from income from dependent activity and from business and other independent gainful activity, which are reduced by non-taxable parts of the tax base and also expenses.
4. What is the non-taxable part of the tax base
5. What are the expenses of a sole trader
A sole trader can choose one of the possible methods of applying expenses that is advantageous for them, which includes:
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so-called flat-rate expenses amounting to 40 % of the total income (i.e., from business income according to § 6 para. 1 and other independent gainful activity according to § 6 para. 2) up to a maximum of 5,040 euros annually
The most commonly applied tax expenses for a sole trader include, for example:
Travel expenses
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Expenses of a sole trader (taxpayer with income according to § 6 sections 1 and 2) incurred in connection with activities performed in a location other than the place where the activity is regularly carried out, up to the maximum amount established for employees according to the law on travel allowances, including meals, accommodation, travel by transport means, and necessary expenses associated with the stay in this location;
Insurance and Contributions
For a sole trader, tax expenses also include demonstrably paid insurance and contributions, paid by the taxpayer in connection with generating income from the trade.
Advertising Expenses
As tax expenses, a sole trader can claim advertising expenses incurred for the purpose of presenting the taxpayer's business activities, goods, services, real estate, trade name, trademark, trade designation of products, and other rights and obligations related to the taxpayer's activities with the aim of achieving, securing, maintaining, or increasing the taxpayer's income.
Commissions for Mediation
Expenses for commissions for mediation at the service recipient, even if it involves mediation based on mandate contracts or similar contracts concluded according to the Commercial Code or the Civil Code, are tax expenses from 1.1.2015 only after payment and up to a maximum of 20 % of the value of the mediated transaction.
The limitation on the amount of commission does not apply to natural persons performing activities according to § 6 to 12 of Act No. 186/2009 Coll. on Financial Mediation and Financial Advisory Services.Other Tax Expenses
The following are also considered tax expenses:
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Local taxes and local fees according to special regulations and fees related to activities from which income is subject to tax,
6. Form for Filing a Tax Return
7. Filing a Tax Return
Example of a Freelancer's Tax Return
Anna was a freelancer last year, she is childless and single. Her total income amounts to 9000 euros. During the months of her business activity, she paid 1000 euros to the social insurance and 500 euros to the health insurance. The simplest way to file a tax return is to apply for flat-rate expenses. With this option, there is no need to document expenses or keep accounts. Anna fills out the type B tax return form as follows.
8. Minimum Tax Amount
The tax is not assessed and not payable if it does not exceed 16.60 euros for the tax period, or if the total taxable income of the taxpayer, who is a natural person, does not exceed 50% of 19.2 times the amount of the applicable subsistence minimum for the tax period. The calculated tax is rounded down to the nearest eurocent.
9. Tax Payment
If you are required to pay tax, it must be paid by the end of March. If you do not know the account number and variable symbol, please inquire at the tax office in the location of your permanent residence.
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