Czech Republic

On this page you’ll find everything you need to know about Czech Republic VAT registration, Returns, Tax Representation and your legal obligations within the Czech Republic.

Looking to sell goods into Czech Republic?

Why is VAT Registration Required?

When a business sells goods in foreign countries this action may trigger the obligation to register for VAT in the country where the transactions are taking place. In most cases you must VAT register and charge the local VAT rate of the country. Below are some of the scenario’s where VAT registration may be required;

  • Importing goods into the country for sale
  • Buying and selling goods locally
  • Storing goods in the country
  • Organising an event in the country

Other taxable supplies may require VAT registration in the Czech Republic

 

Czech VAT Penalties

Filing and reporting the correct VAT accurately and on time is a legal requirement once you are Czech VAT registered, failure to meet these obligations may mean you are subject to penalties, fines or late filing fees for missing the returns deadlines. The Czech tax office is also entitled to charge penalties for failure to register for VAT in a timely manner before or after your first taxable transaction within the Czech Republic. Inaccurate or incorrect filings will trigger penalties of 20% of the additional tax liability. In addition, interest is charged on late payment of VAT at the repurchase rate set by the Czech National Bank plus 14%. Interest can only be charged for five years.

There is a three year statute of limitations for Czech VAT, There are exceptions to this, for example, in the case of businesses which commit repeated tax offences the stature of limitations may be extended to ten years.

What Czech VAT can be Deducted?

Businesses are able to include their input VAT in their VAT return to off-set some of the output VAT they owe to the tax office. Different countries follow different rules on what they enable you to deduct/reclaim VAT on.

The following cannot be reclaimed;

  • Entertainment
  • Taxi costs
  • Telephone costs
  • Fuel for transportation
  • Restaurant and catering costs
  • Accommodation costs
  • Travel costs

Czech Republic VAT Refunds

There is no automatic carry-forward mechanism in Czech Republic. VAT Refunds are done immediately (generally within one month from the deadline for submission of the VAT return) as long as the amount exceeds CZK 100.

VAT Rates

EU Member States must apply a standard VAT rate which is not lower than 15% and must be the same for the supply of goods and services. EU Member States may apply either one or two reduced rates which are not lower than 5% only to supplies of goods or services as listed in the Annex III of the VAT Directive.
See below the Czech Republic VAT Rates for goods and services at standard and reduced rate.

VAT Rate Type Goods/services
21% Standard All other taxable goods and services
15% Reduced Foodstuffs (excluding essential child nutrition);Pizza – take awaywater supplies;medical equipment for disabled persons;children’s car seats;public transport;newspapers and periodicals;admission to cultural events, shows and amusement parks;social housing;renovation and repair of private houses;cleaning of private households;some agricultural supplies;hotel accommodation;admission to sport events;use of sports facilities; social services;supplies to undertakers and cremation services;medical and dental care
10% Reduced Foodstuffs marked as essential for child nutrition
restuarant services – food and beverages (pizza in a restaurant), pharmaceutical products, books, e-books and, audiobook, household cleaning services, hairdresser, services, bike repair services, kids and seniors care services
0% Zero Intra-community and international transport

When to file Czech VAT returns?

Once you have received your Czech VAT registration number you will have obligations to carry out and file your monthly, quarterly or annual vat returns. It’s helpful to know the deadlines for filing  to avoid any late penalties or unwanted fines.

Type of return Frequency Filing Deadline
VAT return Monthly 25th day of the month after filing period
Quarterly 25th day of the month after filing period
EC Sales List Monthly 25th day of the month after filing period
Quarterly 25th day of the month after filing period
Intrastat Monthly 10th  day of the month after filing period in paper form
12th  day of the month after filing period if electronic
Quarterly 10th  day of the month after filing period in paper form
12th  day of the month after filing period if electronic
Annually 10th  day of the month after filing period in paper form
12th  day of the month after filing period if electronic

 

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VAT Registration & Filings

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VAT Registration & Filings

Unlock your sales potential with our bespoke VAT registration and filings services. Our team is ready to identify your VAT obligations allowing your business to expand across the world with a dedicated team beside you.

Leave the complexities to us, our professional team provide a seamlessly fast registration service and help you keep on top of the various filing deadlines so you can keep on top of what matters most.

Import/one stop shop

The two simplification schemes allow for both EU and non-EU businesses to lower the cost of VAT compliance and report multiple transactions using only one registration.

Enrolling in the schemes allows businesses to charge the correct VAT rate of each European country without the need to register for VAT in every member state.

The One Stop Shop and Import One Stop shop have set requirements for businesses to follow to stay compliant, find out more in our service guides.

fiscal representation

When a non-European business trades with the EU, some member states impose the need for a fiscal representative to be appointed for registration, filing, imports or VAT reclaims depending on the various EU rules.

VAT Digital is a recognised and certified European Fiscal Representative allowing for our non-EU clients to trade freely with the EU. This enables a lot of benefits for businesses when registering and importing goods to the European Union.

VAT refunds

Selling internationally can be very profitable but also increase the burden of expenditure for businesses. VAT expenses on goods, services and other operations outside of your home country can be difficult to recover due to the lack of registration or non-compliance.

VAT Digitals specialist team can help identify where VAT can be recovered and process a reclaim to ensure your business is maximizing its profits.

Frequently Asked Questions

There are some key dates to the changes of distance selling thresholds in the EU and specifically Czech Republic in this case.

For Czech Republic registered businesses there is a domestic threshold of CZK 1 million

Prior to July 1st 2021 there is a 35,000 EUR distance sales threshold from other EU countries with the Czech Republic as the final destination before you are required to VAT register. This threshold is the NET sales amount.

After July 1st 2021 a new EU wide 10,000 EUR threshold has been announced for EU businesses.

The threshold for non-eu businesses carrying out taxable supplies or services in the Czech Republic is Nil, meaning you will need to VAT register prior to your first activity.

The registration length can widely vary from business to business and depending on if the correct documents have been submitted. With VAT Digital an average Czech VAT registration takes around 4 weeks to receive your VAT Number.

In the Czech Republic, a fiscal representative is not required for non-eu businesses. A local agent is recommended but not mandatory.

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