New rules for foreign VAT registered businesses from 1 January 2025
Effective 1 January 2025, significant amendments to the Czech VAT Act will impact foreign entities registered for VAT within the country. Although the legislation is pending final approval, it is widely expected to pass without issue. These changes introduce new obligations for foreign businesses, specifically those established outside the EU and lacking a VAT establishment within the Union.
Read more in our Czech VAT country guide.
Introduction of the “Agent for Delivery”
Under the forthcoming law, foreign VAT-registered entities must appoint an “agent for delivery” (in Czech, zmocněnec pro doručování). This individual or entity will serve as an intermediary for communications with Czech tax authorities and must possess a data box (datová schránka), which is a secure electronic mailbox established under Czech law. The agent’s role will ensure seamless delivery and receipt of official documents concerning VAT matters.
Obligatory Appointment and Deadlines
Foreign businesses registered for VAT in the Czech Republic before 1 January 2025 but lacking a data box must appoint an agent by 28 February 2025. Failure to comply with this requirement will incur substantial penalties: CZK 1,000 per day of non-compliance.
The agent acts as the official recipient of all VAT-related correspondence, assuming full responsibility for the delivery of documents on behalf of the foreign company. This obligation applies even if the foreign entity operates without a local establishment or employees in the Czech Republic.
Interaction with General Power of Attorney
If a foreign company has already granted a general power of attorney (GPOA) to a Czech-licensed individual or organization authorized to act on its behalf—including receipt of tax documents—the requirement to appoint a separate agent may not apply. However, the authorized representative under the GPOA must also possess a legally mandated data box. Acceptable representatives include licensed tax advisors, lawyers, or Czech-registered companies.
Broader VAT Compliance Context
The Czech VAT regime is characterized by stringent administrative requirements for foreign entities. Non-resident VAT registration applies broadly to businesses supplying goods or services in the Czech Republic that exceed local thresholds or trigger reverse charge mechanisms. The mandatory use of data boxes aligns with efforts to modernize tax administration and streamline compliance through digital channels, further reducing fraud and increasing efficiency in tax collection.
Foreign businesses navigating these changes must assess their VAT compliance frameworks and engage with qualified local advisors to avoid penalties and ensure uninterrupted operations within the Czech Republic.
