Czech Republic
VAT Basics
What are the VAT rates in the Czech Republic?
Czech Republic has opted for the reduced VAT rates on a number of items allowed by the VAT Directive.
VAT Rates by goods and services in the Czech Republic
The standard VAT rate is 21%. The standard VAT rate generally applies for all goods and services for which no exemption, 0% or one of the reduced VAT rates is foreseen.
The reduced VAT rate is 12%. This reduced rate was consolidated in January 2024, and prior to that date, there were two reduced rate applicable of 10% and 15%. The 12% reduced rate applies to certain food products, passenger air transport, medical and social care, restaurant and catering services, water distribution, admission to cultural and sporting events, and hotel accommodation, among others.
Some goods and services that were subject to a reduced rate are now standard rated, such as hairdressing, several repair services, etc.
Supplies and services at 0% are the standard supplies, such as exports or intra-Community supplies.
Finally, some supplies are VAT exempt, such as health services, public education, and financial services, among others.
For a precise confirmation of the VAT rate applicable to your product or service in the Czech Republic, we recommend that you contact us.
VAT Deduction Limits in Czech Republic
Input VAT is generally deductible as long as the goods or services are used for business purposes.
However, certain expenses are subject to special rules:
- Hotel accommodation: input VAT is generally deductible.
- Business gifts of a cost higher CZK 500: input VAT is generally not deductible.
- Business entertainment: input VAT is generally not deductible.
- Passenger car purchase, hire and maintenance: input VAT is generally deductible.
- Advertising: input VAT is generally deductible.
- Mobile phones: input VAT is generally deductible.
- Fuel for vehicles: input VAT is generally deductible.
- Books: input VAT is generally deductible.
Particular VAT deduction rules apply to VAT refund claims of non-EU businesses. A valid and fully compliant VAT invoice must be issued for each expense on which VAT is deducted.
Statute of Limitations in Czech Republic
The statute of limitations is three years in Czech Republic, starting from the day of deadline to filing the correspondent tax return. However, this time period may be extended under specific circumstances, although there is a maximum of 10 years from the beginning of the limitation period.
The statute of limitations period determines the periods on which the tax authority can go back to review the information declared, and apply additional VAT assessments, penalties or interests.
The statute of limitations also determines the period a taxpayer can voluntarily correct any errors on past submissions, as well as deduct input VAT.
You can find an overview of the statute of limitations in Europe under the following link.
Tax Point Rules in Czech Republic
The tax point is the time when VAT becomes due. VAT due should be distinguished from VAT payable. VAT is due when the tax point occurs. VAT is payable between the day after the end of the reporting period and the due date to submit and pay the VAT return.
- General rule: When the supply of goods or services takes place, or by the date of payment, whichever occurs earlier. Particular rules apply to specific supplies of goods or services.
- When it comes to services, the taxable transaction is considered to be made when supplied, or the date of issue of the invoice, with the exception of an installment or payment schedule, on the day that occurs earlier.
- Advanced payments: Tax point is considered to have occurred when the advanced payment is received.
- Continuous supplies: In the case of services taxable in Czech Republic and supplied for more than 12 calendar months, the liability to account for VAT arises, at the latest, on the last day of each calendar year following the calendar year in which the provision of the service has started. This provision does not apply in case of advanced payments, or in the case of heat, cooling, electricity and gas.
- Intra-Community acquisitions and supplies: Tax point occurs on the invoice date or the 15th day of the month following the month in which the invoice was issued, whichever occurs earlier.
- Import: Tax point occurs when the goods are imported according to the relevant import documents.
Reverse Charge in Czech Republic
Reverse Charge for Non-established Companies in Czech Republic
According to art 194 of the VAT Directive, Member States may implement an optional reverse charge on supplies made by non-established businesses.
Czech Republic has introduced this reverse charge on certain supplies performed by a non-established supplies, provided that the requirements are met:
Domestic supplies of services and delivery of goods via systems or networks:
Supplies of goods with installation:
Reverse charge does not apply if the customer is not VAT registered.
Reverse Charge on B2B Services
Article 196 of the VAT Directive requires the reverse charge mechanism on all services subject to the B2B rule introduced in art. 44 of the same Directive. The B2B rule locates the transaction where the business customer is located. In case the customer is a private individual, B2C rules locate the transaction where the supplier is located.
According to the general B2B rule, any business resident outside Czech Republic supplying services to a Czech based customer will not charge any VAT and the transaction will be reverse charged by the customer.
There are however a number of exceptions to this rule. Where these exceptions apply, reverse charge is still applicable in Czech Republic provided the following conditions are met:
- Services connected to immoveable property are located where the property is located.
- Passenger transport services will be located where the transport takes places (apportioned if necessary).
- Catering services are located where the catering takes place.
- Short term leasing of means of transport are located where the vehicle put at the disposal of the customer.
- Access to conferences, fairs and exhibitions is located where the event takes place.
The general rule may also be deviated where the supplier has a permanent establishment in the country of the customer and the PE has intervened in the supply.
Reverse Charge on Specific Goods and Services in Czech Republic
Domestic reverse charge may also apply to domestic supplies of certain goods and services made by companies in Czech Republic. The following reverse charge scenarios apply irrespective of the country of establishment of the Supplier:
- Supply of investment gold.
- Supply of immovable property and immovable property in compulsory sale procedure.
- Supply of designated categories of scrap and waste.
- Transfers of CO2 emission allowances.
- Supply of gas and electricity through networks to a taxable dealer.
- Supplies of construction services and supply of staff in construction and assembly work.
- Delivery of goods originally provided as a guarantee.
- Delivery of goods after transfer of retention of title (reservation of ownership) to an assignee and the exercising of this right by the assignee.
- Certain deliveries of communication services.
Additionally, the local reverse charge applies to certain supplies of goods made between Czech VAT registered taxpayers exceeding CZK 100,000:
- Mobile phones
- Laptops and tablets
- Game consoles
- Certain integrated circuits
- Cereals and technical crops
- Certain raw or semi-processed metals
- Reverse charge does not apply if the customer is not VAT registered.
VAT Returns in Czech Republic
Frequency of VAT Returns in Czech Republic
The standard frequency of filing of the periodic VAT returns is monthly. However, tax authorities may authorize a quarterly reporting period depending on the annual turnover and other conditions:
Frequency of filing:
Due Date of Czech VAT Returns
The deadline to submit the Czech VAT return is the 25th day of the month following the reporting period.
Find here the tax calendar.
VAT Payments in Czech Republic
The VAT payment must be made within the same deadline as the VAT return submission, by the 25th day of the following month.
The tax payment methods available are:
- in cash at the cash desk at the local competent Tax Office,
- by postal order,
- by bank transfer (non-cash payment form).
Usually, VAT payments are made via bank transfer. The tax authorities publish the list of bank accounts (and correspondent IBAN details) per tax office. It is important to note that each tax office has a different bank account where the tax payers assigned must made the VAT payments.
The payment reference to include is the taxpayer’s Czech tax number without specifying the CZ country code.
Find here and here more information about paying taxes in Czech Republic.
VAT Refunds in Czech Republic
The excess of input VAT is automatically and immediately refunded to the taxpayer. This is, when a taxable person declares more VAT deductible – e.g., due to purchases-, than VAT collected from sales, the difference is a VAT credit which shall be reimbursed to the taxpayer. The VAT refund shall be received in approximately 30 days, unless the tax authorities initiate a tax audit.
However, when the VAT refund is less than CZK 200 – then we have 2 options:
- Request it back through this form Záhlaví - Obecná písemnost určená pro podání orgánům Finanční správy ČR - Daňový portál: Elektronické podání (mfcr.cz)
- Use this amount as a credit for the next period due if they are in payable position. No need to include this amount in any box of the VAT return, just discount the amount from the payable position as ask the client to pay the difference.
In any case, to correctly receive the VAT refund, it is important that the tax authorities have the right information about the taxpayer’s bank account. Usually, they will use the bank details submitted at the moment of the VAT registration.
Nil and Corrective VAT Returns in Czech Republic
A nil VAT return needs to be submitted even if there are no transactions to be reported for that period.
Errors or omissions in a VAT return must be corrected, even if they do not impact on the VAT position for the corresponding period. You will need to submit a corrective return. The corrective VAT return replaces the previous return submitted for the same period in full. This means that the corrective return must include all details that were already correct in the original return as well as the corrected details. Additionally, if there is additional output VAT to be paid as a result of the correction, you should do it.
When submitting a corrective VAT return, penalties and interest may apply.
In any case, the general deadline to make corrections on previous reporting periods is 3 years calculated from the accounting period or tax year which the tax concerns.
VAT Penalties in Czech Republic
Tax authorities impose penalties for the late VAT payment and late submission of a VAT return. A penalty of 0.5% over the VAT liability is calculated per day of delay up to 5% of the VAT liability, or a fixed penalty up to CZK 300,000 per VAT return. In principle, no penalty is charged during the first five days after the deadline.
Czech Tax Authorities Contact
General Financial Directorate
Division: VAT International Cooperation (CZ CLO)e-mail: vies.dph@fs.mfcr.cz
Customs Office for the Capital City of Prague
(Data box: k8dny3x)
- E-mail: podatelna51000@cs.mfcr.cz
- Telephone: 261 334 581 or 261 334 582, or the office of the Customs Office at 261 334 350
Find here the Directorate with contact details of all tax offices in Czech Republic.
ESL Returns in Czech Republic
Due Date and Frequency of ESL Returns in Czech Republic
The due date for submitting monthly or quarterly ESL returns is always the 25th day of the following month.
The applicable reporting period shall be monthly. Quarterly filings are allowed in particular cases.
Nil and Corrective ESL Returns in Czech Republic
If there are no intra-Community transactions to be reported in a given period, a nil an ESL is not due in Czech Republic.
Corrective ESL returns shall be filed within 15 days from the date when the taxpayer who filed Recapitulative Statement finds out that he had stated incorrect data there.
The corrective ESL return is used to correct data stated by the taxpayer in previous filings (Recapitulative Statement or Corrective Recapitulative Statement) related to the calendar quarter concerned. Correction of data means adding new line (in the case that there was not such line in the previous filing), cancellation of the line from the previous filing (in the case that the line should not have been stated there), or the correction of information in the lines of the previous filing.
The correction of an ESL return is made:
- through adding new line filling in all the data stated in the section B.
- through cancellation of a line from the previous filing crossing it out in the column marked as “Cancellation of the line”. The Corrective Recapitulative Statement shall contain all the data of the original line in the cancelled line.
- through correction of data in the line of the previous filing cancelling the original line and adding a new line without mistake.
Penalties for Late ESL Returns in Czech Republic
In case the company is requested to submit the ESL return and fails to do so, the tax authority may impose a penalty of CZK 500. Also, in serious cases of obstruction to compliance, the tax authority may impose a penalty up to CZK 500,000.
Intrastat returns in Czech Republic
Frequency of filing and due date of Intrastat returns in Czech Republic
Like in most EU countries, Czech Intrastat returns are filed monthly. They follow the calendar month.
The due date for submission is the 12th working day of the following month.
Finally, Intrastat returns must be completed in CZK currency in Czech Republic.
Czech Republic Intrastat thresholds
The following annual Intrastat thresholds apply in Czech Republic (calendar year) in 2024:
- Arrivals: CZK 15,000,000
- Dispatches: CZK 15,000,000
Also, there are additional thresholds for detailed Intrastat submission:
- Arrivals: CZK 30,000,000
- Dispatches: CZK 30,000,000
Find here the 2024 thresholds in CZ.
However, if the taxpayer is making intra-Community transactions with certain goods not intended for simplified reporting, the detailed Intrastat will always be due irrespective of the threshold.
These thresholds are computed annually according to the calendar year. Once filed, a complete calendar year needs to be covered by a company in order to stop filing these returns. For example, if a company exceeds the threshold in March 2022 on arrivals, Intrastat returns for arrivals are due until December 2023. These thresholds are calculated according to the invoice value. The authorities monitor the thresholds and often send letters to each taxpayer requiring them to file missing Intrastat return.
Have a look at our overview of Intrastat thresholds.
Also, you can find here the official information about goods not intended for simplified reporting. Finally, have a look at the information about simplified reporting.
Reporting of specific scenarios in Czech Republic
Very often, the transactions reported in the Intrastat return are standard sales from one taxable person to another. However, a number of scenarios have specific reporting requirements.
Section 8.5 of the Intrastat manual contains the full list of transaction nature codes for Intrastat in Czech Republic.
Nil and corrective Intrastat returns in Czech Republic
If no transactions are to be reported, a nil Intrastat return must be filed.
Concerning correcting Intrastat returns, you must check the guidelines provided in the official Intrastat guide of the year to which the correction shall be made.
As per the current information, corrections of inaccurate or erroneous data from the Intrastat Declaration which has already been transmitted to the customs office shall be made by making a complete, correct and complete new Declaration in paper form for the reference period for which the incorrect Declaration was transmitted.
Corrections to a Declaration in which some information is missing must be made in the same way. The new document with the correct data shall be clearly marked 'CORRECTION' in the top right-hand corner. Lines with completed or corrected data shall be marked with a cross in the right-hand margin of the Declaration form.
Intrastat Penalties in Czech Republic
Taxpayers not submitting Intrastat returns are subject to a penalty of up to CZK 1 million for late submission, missing or inaccurate declaration.
