New notice on Czech VAT rules for non-established businesses

Czech tax authorities recently published a manual covering the main topics of interest for foreign businesses trading in Czech Republic without a permanent establishment.

The Czech tax authorities published a detailed manual on the most relevant VAT obligations for foreign businesses with activities in Czech Republic but without a permanent establishment in the country.

The Czech tax authorities often ask questions before accepting an application for a VAT registration in the country. This notice will provide transparency and a good resource to refer to legislation and local rules when supporting VAT registration requests.

Content of the notice on Czech VAT rules

This notice provides detailed rules as to which transactions would trigger the obligation to register for VAT purposes by non-established companies in Czech Republic. Each type of transaction includes practical with examples in real-life of the sale or purchase described.

The publication also elaborates on the scope of domestic reverse charge as implemented from Article 194 of the EU VAT Directive. Czech Republic applies this mechanism in sales of goods or services located in the country that are made by non-established suppliers who are not VAT registered in Czech Republic.  You can read more about domestic reverse charge in our dedicated article to Reverse charge scenarios.

The notice also elaborates on the VAT registration requirements in the country and explains the difference between mandatory and voluntary VAT registration. It also clarifies that having to pay excise duty in the country automatically triggers the obligation to register in Czech Republic. Additionally, it explains the VAT registration process. The Czech tax authorities allow electronic submission of VAT registration documents, although these documentation requires a setup of DataBox and a digital certificate to be issued for the agent submitting the application.

The last section describes the periodic VAT reporting obligations, including deadlines, content and even certain boxes to be completed in the VAT return.

Where can I find the notice on Czech VAT rules?

The complete report is available in the website of the Czech tax authorities. We recommend reviewing the information available in this website as there is useful information about VAT reporting obligations, VAT payments and MOSS regime.

Contact Marosa to get help with Czech VAT registrations or reporting obligations. Our Czech team is specialized and has daily contacts with the tax authorities so that your obligations are processed as a matter of priority.

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