Everyone who has VAT registration in the Czech Republic must file a VAT return electronically. The tax period can be a month or a calendar quarter:
| Turnover (Annual) | Mandatory Tax Period |
|---|---|
| Over CZK 10 million | Monthly VAT return |
| CZK 2 – 10 million | Choice between monthly and quarterly |
| Up to CZK 2 million | Quarterly VAT return |
| Non-established entities (Foreigners) | Always Monthly (first 2 years) |
Example: A limited liability company with an annual turnover of CZK 1.8 million will have a mandatory quarterly tax period. On the contrary, an LTD with a turnover of CZK 11 million per year must switch to monthly VAT returns.
The control statement is closely connected with the VAT return. Its aim is detailed control of domestic transactions between VAT payers / VAT registered companies.
Basic principles:
Example: A company has monthly VAT returns. For January it must file by 25 February:
– the VAT return
– the control statement
– and, if applicable, pay the calculated VAT
Errors or delays in the control statement are often penalised more strictly than ordinary delays in the VAT return. Failure to submit the control statement can result in a penalty of up to CZK 50,000 (i.e. EUR 2,000).
If you provide or receive supplies within the EU, you may incur an obligation to file a recapitulative statement – sometimes referred to as an “EU statement”.
It relates in particular to:
Basic rules:
Example: An UK company registered to Czech VAT supplies goods to a VAT payer in Germany. The supply is exempt from VAT in the Czech Republic, but it must be:
– reported in the VAT return, and
– declared in the recapitulative statement for the given month.
The VAT return, control statement and recapitulative statement are filed exclusively electronically. The most common methods:
What needs to be monitored:
Failure to comply with VAT obligations is one of the most common areas where the tax office imposes fines and interest. Penalties apply to:
| Type of Failure | Penalty / Risk |
|---|---|
| Late VAT Return filing | 0.05% of tax due per day (max 5%) |
| Control Statement failure | Fixed fines: CZK 1,000 to CZK 50,000 |
| Late VAT Payment | Default interest (Repo rate + 8%) |
Example 1 – late VAT return: The VAT return for the quarter should have been filed by the 25th day of the month, but the entrepreneur files it 18 days late. The tax office assesses a fine calculated as 0.05 % of the VAT obligation for each day of delay.
Example 2 – control statement: A company forgets to file the control statement. The tax office sends a notice, to which the company responds only after the deadline. A separate fine may be imposed in the amount of CZK 50,000 (i.e. EUR 2,000).
Example 3 – recapitulative statement: A company regularly supplies goods within the EU, but stops filing recapitulative statements. The authority may assess VAT for these intra-Community supplies.
Well-set processes and high-quality tax advisory significantly reduce the risk of penalties – both for VAT and for corporate income tax.
As a rule, by the 25th day after the end of the tax period (month or quarter). The same deadline generally applies to the payment of the tax.
Yes. If you have VAT registration, you file a VAT return (and usually also a control statement) even in periods with no supplies – as a “nil” return (recommended otherwise the tax office may close your VAT registration).
The tax office will call on you to remedy the situation. If you ignore the notice, the fine amounts to CZK 50,000.
Yes, all these filings are now made exclusively electronically, most often as XML via EPO or the data box.
Do you need help with VAT? We take care of complete VAT registration, VAT returns, control statements, and corporate income tax compliance. We provide ongoing tax advisory, including correct XML filing and minimisation of penalties.
Contact us today and save yourself time and worries.
Author: Ing. Ondřej Antoš, LL.M., tax advisor - member of the Czech Chamber of Tax Advisers.