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Important changes to Czech VAT Law

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Important changes to Czech VAT Law

The Czech government has introduced important changes in the Czech VAT Act. The tax office in charge of non-established VAT registered companies will change from Prague 1 to Ostrava tax office. All VAT registered businesses must take this change into account when contacting the tax authorities or submitting additional information in the course of an audit.

Also, the penalties for not complying with the new Control Report have been increased. This report was introduced last year and is now required from all registered taxpayers. Following the first year of implementation, the authorities will impose stricter controls on the submission of this new obligation.

Finally, as announced in our previous newsletters the use of reverse charge mechanism has been extended extended to all supplies of goods and services made by a non-established supplier. The customer must be VAT registered, although it is not required that the client has a permanent establishment in the Czech Republic for this mechanism to apply.