#140Lump sum expenses in 2025
According to Act No. 595/2003 Coll. on Income Tax, as amended (Income Tax Act), a taxpayer may claim lump sum expenses or expenses as a percentage of income on the expenses side of his tax return. For these expenses, the taxpayer does not have to incur them at all, but he may deduct them when calculating the tax.
A taxpayer who is a sole proprietor or other self-employed person who is not a VAT payer or is a VAT payer for only part of the tax period can claim flat-rate expenses, in the amount of 60% of taxable income, up to a maximum of EUR 20,000 per year. These flat-rate expenses include all tax expenses except for contributions paid to the Social and Health Insurance Fund, which the taxpayer can deduct separately.
A new taxable income threshold has also been applied since 2025, increasing from the original 60,000 Eur to EUR 100,000 at a tax rate of 15%. Therefore, a 15% tax rate will apply to taxable income not exceeding EUR 100,000, while a 19% tax rate will apply to higher incomes.
The method of applying expenses is at the discretion of the taxpayer, however, the taxpayer is obliged to apply the chosen method throughout the entire tax period. The taxpayer may change the chosen method of applying expenses only in individual tax periods, i.e. as of 1 January of the relevant calendar year.
The application of flat-rate expenses is advantageous for taxpayers in simple businesses with relatively low actual expenses if:
- the taxpayer's actual costs are lower than the lump sum expenses (maximum EUR 20,000 per year);
- the taxpayer applies simple tax records (only tracks income, receivables, liabilities and assets;
- the taxpayer has stable income without major investments; or
- this is a business in the field of IT services, the arts or consulting, where actual costs are generally low.
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- AuthorAdmin
- Date23.1.2025
- Webwww.lexante.sk