VAT compliance and reporting rules in Czechia 2024
Below is summary of the major rules provided under Czech VAT rules (Value Added Tax Act of 2004 (ZDPH)), plus adoption of EU VAT Directive provisions. Check our country VAT guides for other jurisdictions.
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Czechia VAT country guide
| Highlights | Local term | Dan z pridané hodnoty (DPH) |
| VAT Rates - standard | 21% | |
| VAT Rates - reduced | 12%; 0% | |
| Rates news | ||
| VAT number format | CZ 12345678; 123456789; or 1234567890 | |
| Registration threshold | CZK 2million (approx €80k); Nil for non-residents; CZK 250k (approx €10,150) for pan-EU digital services and goods OSS return. Intra-community acquisitions CZK 250k (approx €10,150). | |
| VAT Group | Yes | |
| VAT recovery foreign businesses | Yes, but requires reciprocity agreement for most non-EU businesses | |
| Fiscal Representative | Not required | |
| Currency | Koruna, CZK. Preparing to joint the Euro € | |
| Administration | Introduction | VAT was introduced in the Czech Republic in January 1993. It joined the European Union in 2004. |
| VAT laws | Czech Value Added Tax Act of 2004 (ZDPH); Also EU VAT Directive which takes supremacy as part of EU membership | |
| Tax Authorities | General Directorate of Finance, part of the Ministry of Finance. Non-Czech businesses should deal with Moravian-Silesian office (Ostrava) | |
| VAT Rates | Standard rate | 21% |
| Reduced rates | 12%: foodstuffs; air passenger transport; medical care; non-alcoholic drinks; medicine; malt; baby food; public transport; restaurant and catering; drinking water; hotel accommodation; cultural and sporting entrance; newspapers | |
| Zero-rated | Intra-community passenger travel by air and sea; Exports and intra-community supplies of goods; gold to central banks; services related to vessels and aircraft; some journal publications; books and related services | |
| Exempt | Education; financial services; health, hospital, and social welfare; public postal; letting immovable property; betting and gambling; welfare services; charities and political organisations; public broadcasting | |
| Scope of VAT | Scope of VAT | Provision of domestic taxable goods and services; EU imports; intra-community acquisitions; Distance selling of goods B2C (OSS or IOSS); receipt of services or goods via the reverse charge |
| Time of supply | Goods & Services (general rule) | The earlier of the supply (goods delivery and services provision) or payment dates. Any advance or down payment triggers a VAT liability point |
| Reverse Charge | As per general rule, earlier of: payment; provision of supply; or end of calendar year for services | |
| Continuous Services | Earlier of: contract dates; payment; completion of contract; end of calendar year | |
| Imports | Date of clearance from customs into free circulation. Postponed import VAT accounting may be used to avoid cash payment (see separate) | |
| Goods on approval and return | General rule applies (see separate) | |
| Registration | VAT registration threshold | CZK 2million (approx €80k); Nil for non-residents; CZK 250k (approx €10,150) for pan-EU digital services and goods OSS return. Intra-community acquisitions CZK 250k (approx €10,150). |
| Voluntary VAT registration | Permitted | |
| VAT number format | CZ 12345678; 123456789; or 1234567890 | |
| VAT Group | Yes where two or more businesses have close ownership (40%+), economic or financial ties. The members take on a single VAT identity and number, and one nominated takes responsibility for consolidated VAT filings. Non-residents without fixed establishment may not join. All members share the VAT liability jointly. Resident holding companies without a taxable supply may be included. | |
| Non-residents | Permitted without major differences. No Fiscal Representative required. | |
| Fiscal Representative | Not required | |
| Digital Services | Czech participates in the EU single One Stop Shop (OSS) VAT return for digital, telecoms and broadcast services. This was formerly the MOSS regime until 30 June 2021 | |
| Pre VAT registration costs | Generally costs incurred without twelve months prior to VAT registration. Extra provisions for assets | |
| VAT Invoices | Issuance | Invoices should be issued within 15 days of the tax point (see separate). Intra-community supply invoices should be invoiced by 15th day of month following supply. Invoices for transactions with non-VAT registered persons do not require an invoice. |
| Content | Date; unique sequential invoice number; name and address of supplier and customer; Customer VAT number for intra-community supplies or reverse charge; date of supply or advance payment if different from invoice date; Description, quantity or units etc of supply of goods or services; price per unit; taxable amount; VAT charged; rate (broken out if supplies at different rates); total; explanation if zero-rated supply. | |
| E-invoices | Permitted with agreement of customer. In accordance with EU e-invoice Directive EU Directive 2010/ 45/EU | |
| Simplified invoices | Permitted for transactions not exceeding CZK 10,000. May excluded customer details and gross and net pricing. This may generally be used for domestic supplies - excludes intra-community supplies or reverse charge. | |
| Self-billing | Permitted with a written agreement between the seller and purchaser. In the case of e-invoices, the supplier must electronically accept the customer's invoice | |
| Retention of invoices | Ten years. Paper invoices may be digitised. Notification to the tax authorities for storage outside of Czech. | |
| FX rules | Invoices may be issued in foreign currencies, but the VAT amount should be shown in CZK. The FX rate should be from the Czech Central Bank or European Central Bank at the time of supply. | |
| Invoice corrections | Credit or debit notes may be used for up to three years after the original tax point. It should refer to the original invoice number and provide an explanation for the adjustment. | |
| Compliance | Right to deduct | Excluded: business entertainment; business gifts exceeding CZK 500 |
| Call-off stock | Following the EU's 2020 Quick Fix harmonisation reforms, stock may be transferred from an EU state to an customer location/warehouse in Czech without triggering a VAT registration and supply for a non-Czech supplier. Title has not passed until the customer takes the goods for production and sale. At which time a zero-rated transaction may be effected. This must happen within 12 months of the original movement | |
| Reverse Charge - B2B | Aside from the regular B2B cross-border services use of the reverse charge, Czech also applies the shift to the customer's VAT reporting in the following cases: domestic supplies of goods or services by non-resident without a VAT Czech number (does not apply if foreign vendor has a Czech number) and the customer is Czech VAT registered; domestic supply of: construction, scrap, computer chips, mobile phones, games consols, laptops and tablets, some commodities, CO2 emission certs | |
| Cash discounts | Discounts taken-up by customers must be accounted for in the month of return. If the invoice is issued in a different month from the payment and discount, then a credit note must be issued which the customer must accept for both side to adjust their respective returns | |
| Bad debt relief | Allowed where unsuccessful legal action to recover the debt over two years, or bankruptcy / insolvency | |
| Import VAT deferment | Yes, via Czech VAT return of the importer of record. This use of the reverse charge means there is effectively no import VAT cash payment. Exemption is allowed in the case of an import and immediate (30 days) intra-community supply. This requires the importer to hold its customer's valid EU VAT number. | |
| VAT warehouse | Czech does not operate VAT warehouse scheme. But does off customs exempt or bonded warehouses. Goods may be traded within these authorised locations are subject to VAT. Transactions are treated as a domestic supply, and reverse charge applies if seller have not VAT number. | |
| Supply & install | The reverse charge should be used where a non-resident installs goods as a service for a business customer. No registration is required. | |
| Use and enjoyment services | Has been applied in Czech on B2C passenger transport rentals | |
| Capital goods adjustment period | Movable property: five years. Immovable property: 10 years | |
| Non-residents VAT recovery | EU businesses may apply for Czech VAT reclaims through the electronic portal of the tax authorities of their company of residency (8th Directive). Quarterly claims above CZK7,000 permitted, with final claim above CZK 1,000 by 30 Sept of following year. Non-EU businesses must submit a paper-reclaim with supporting invoices via the Czech authorities directly (13th Directive). Czech does require a reciprocal agreement with the country of residence of the claimant. This includes the UK, Norway and Switzerland. Non-EU businesses do not have to appoint an Czech resident Fiscal Representative for the reclaim process | |
| VAT on Digital Services | Czech follows the EU VAT on digital services regime, introduced in 2015. This includes participation in the One-Stop-Shop (OSS) single EU VAT return (formerly MOSS until 30 June 2021) | |
| Live events | ||
| Distance selling threshold for goods | Nil. Following the EU ecommerce VAT package reforms from 1 July 2021, local Czech VAT must be charged on all sales by non-Czech EU e-commerce sellers shipping from within the EU. Imported distance sales not exceeding €150 liable to Czech sales VAT with IOSS return option | |
| Cash accounting scheme | Not provided | |
| VAT registered cash tills | Electronic cash registers are being phased in for retail and hotel service providers. They provide automated real-time reporting of domestic sales (non-resident businesses are exempted). They have been suspended until at least 2024 due to the coronavirus pandemic. | |
| Statute of limitations | Three years | |
| Other | Czech imposed VAT liabilities on the customer: supplier is listed as an unreliable taxpayer by the authorities; or the customer knew or should have known of likely VAT fraud (e.g. new supplier with very low prices) | |
| VAT Returns | Frequency | Monthly. Quarterly if revenues below CZK10m in prior two years. |
| Filing method | Electronic only | |
| Deadlines (inc payments) | 25th of the month following the reporting month for both returns and any payments. | |
| VAT credits | Refunded automatically via VAT return - subject to any VAT audits | |
| Corrections | Corrective return, supported by credit note | |
| Non-residents | Similar to resident businesses. No VAT registration threshold. No requirement for Fiscal Representative. | |
| Other filings | Monthly European Sales Listing for goods and services supplies without any threshold by 25th of month following. If no qualifying goods supplies, then ESL for services may be filed quarterly instead. Intrastat monthly by the 12th (e-filings) of the following month for supply of goods above threshold: dispatches: CZK15 million; arrivals: CZK15 million. A Czech monthly domestic VAT supplies 'Control Statement' or 'e-ledgers' Kontrolní hlášení must be submitted by 25th of the month following reporting month. This lists sales and purchases line-by-line for VAT. | |
| SAF-T | Control Statements since 2016 | |
| Penalties & interest | Max CZK 300,000 for missed return or ESL. The penalty is based on 5% of the declared VAT. Missed return incur a daily charge of 0.05%. Late payments incur 14% charge. Misdeclared VAT may be subject to max 20% fine. | |
| B2C Distance Selling returns | Czech participates in the One-Stop-Shop OSS pan-EU VAT return for distance selling, introduced in July 2021. |
