Czech VAT is generally due on the supply of goods or services with the place of supply in the Czech Republic and where carried out by a taxable person in the course of economic activities.
The taxable supply usually means goods or services provided for a consideration. However, certain transactions carried out for no consideration represent also a taxable supply, e.g. private use of business assets and provision of gifts.
Czech VAT is charged at three rates:
The Czech Republic plans to change the VAT rates as of 1.1.2024.
Taxable period of Czech entities can be a calendar quarter or a month. If the annual turnover of a Czech entity is higher than CZK 10,000,000, VAT returns have to be submitted on a monthly basis. Should the annual turnover be lower than CZK 2,000,000, VAT returns must be submitted quarterly. If the annual turnover is higher than CZK 2,000,000 but lower than CZK 10,000,000, the tax payer can choose a monthly taxable period. Otherwise, the taxable period is a calendar quarter.
Entities with no seat, place of business, or a fixed establishment in the Czech Republic submit VAT returns monthly. Together with the VAT return must be filled the Control VAT statement in most cases.
The obligation to submit Intrastat reports arises on exceeding the stated threshold for arrival (CZK 8 million) or dispatches (CZK million) for every entity – not only with the seat in the Czech Republic.
VAT registration in the Czech Republic is obligatory for a person who has a registered seat, place of business, or establishment in the Czech Republic, if their turnover exceeds CZK 1 million in twelve consecutive calendar months. Even if the threshold is not exceeded, Czech and foreign entities can choose a voluntary VAT registration in the Czech Republic. The Czech Ministry of Finance wants to change this VAT exemption to small businesses and increase the limits to CZK 2 million.
Entities that have no seat, place of business, or a fixed establishment in the Czech Republic are obliged to register for Czech VAT once they make a taxable supply in the Czech Republic on which they have to account for a VAT. There is no VAT registration threshold and these entities cannot register voluntary. The foreign entity must submit an application for registration as a VAT payer within 15 days after they made the taxable supply – they became VAT payer in the Czech Republic automatically – even without VAT registration. After the process is done, the entity receives a Czech VAT number.
More about the process of VAT registration in the Czech Republic please find here. YourTaxes.cz would be more then happy to assist you with the VAT registration in the Czech republic. We are able to offer a special price for Amazon sellers in the Czech Republic.
Every trader registered for VAT in the Czech Republic who imports goods from a third country into the Czech Republic must declare the import VAT in the VAT return (VAT declaration) and pay the import VAT. At the same time, he can get the VAT refund from the import of goods. This basically means that there is no cash-flow disadvantage connected with the imports in the Czech Republic.
This fact makes the Czech VAT system very advantageus in comparison to other EU countries. We can prepare the VAT return for you and take care of everything that is necessary with regards to your import VAT.
The foreign businesses may also claim the VAT refund from the goods importation based on a special application. The customs clearance must be atteched to the VAT refund request.
The view of the Czech VAT law on an establishment is different than the view of the Income Tax Law. Accroding to the Czech VAT Act an establishment shall mean such branch of a taxable person that can deliver goods or provide services because it is sufficiently permanent and has appropriate personnel and technical resources.
The Czech term of VAT establishment is based on the ECJ law (in the reference by Planzer Luxembourg Sarl (C-73/06)) and on the VAT Directive. Then the same VAT regulations as for Czech entrepreneurs (only available in Czech) apply to you.
We – Yourtaxes.cz – Your Tax Advisor in the Czech Republic – would be more than happy to take care of all VAT compliance relating to your company or your VAT establishment in the Czech Republic. Such as VAT return (every month), tax evidence, VAT control statements, INTRASTAT and recapitulative statements. Besides this we can represent your company at the tax authority.
From January 1, 2024, a number of significant changes will take place in the Czech tax system - the corporate tax rate will increase, VAT rates will change and, last but not least, the tax burden on natural persons will also increase.
In addition to changes in the area of corporate income tax, the Czech Ministry of Finance is preparing to adjust VAT rates. VAT rates should change from January 1, 2024.
The Czech Republic is planning extensive changes to its tax system, including changes to corporate income tax rates, effective from the beginning of 2024, which should help reduce the state budget deficit.