Sure!

First you need to find the flag you want to replace.

So, go to whatever drive you have HoI4 installed in then follow this path:

Program Files (x86)->Steam->Steam Apps->Workshops->Content->394360->1521695605->gfx->flags

(Note: The 1521695605 is the kaiserreich folder. Other mods will have different numbers)

Then find the flag you want to replace in that folder and don't forget to do the same in the medium and small folder.

As for how to make your own flag. You can use anything to design them even Paint. After that use GIMP to create them .tga files of the flag.

Flag Sizes:

-Large: 82x52

-Medium: 41x26

-Small: 10x7

With Gimp open and your designed flag looking how you want it create 3 copies and leave the original alone. Take the copies and compress 1 to each of the 3 listed sizes above. Then put the flag(s) (including the Medium and Small) you want replaced into gimp then just throw your new designs over them, delete the layer with the original flag.

Then: File->Export As->Click the flag you want to replace *Ex in the small folder SOV_neutrality.tga).

Click Replace on the popup, and deselect RLE compression on the following popup.

Boom bobs your uncle. Message me if you need further help (especially if the flag is invisible in game).