VAT Registrations in the Czech Republic

When do you need a VAT number in Czech Republic?

Generally, a foreign business must register for VAT (Value Added Tax or Dan z pridane hodnoty (DPH) in the local language) in Czech Republic as soon as a taxable supply is made. The following are the usual examples of taxable transactions:

• Domestic supply of goods not reverse charged: A supply of goods located in the Czech Republic where reverse charge does not apply requires a VAT registration of the supplier.
• Supply of services not reverse charged: Foreign non-established businesses supplying services on which Czech VAT is due by the supplier must register for VAT. These services are rather exceptional, as the general B2B rule would apply.
• Imports of goods in Czech Republic: when a non-established trader imports goods under his or her own name, a VAT registration may be required in Czech Republic.
• Export: Exporting goods to a non-EU country requires a VAT number before the export is made.
• Intra-Community acquisition: Acquiring goods from another Member State where all conditions for intra-Community movements are met requires the customer to register for VAT.
• Intra-Community supply: Supplying goods another Member State is also a taxable transaction that obliges the supplier to register for VAT.  

Non-established companies must submit apply for VAT registration before performing any of the above taxable transactions. There is no turnover threshold applicable to non-established companies.

Czech established companies can benefit from a VAT registration exemption threshold of CZK 2,000,000, requiring VAT registration as of the first day of the following year. There is a second turnover threshold for VAT registration of CZK 2,536,500, which triggers inmediate VAT registration.

In case you performed taxable transaction in past periods, you can request a backdated VAT registration. You will need to regularize past reporting periods as from the registration date and explain in detail the activity performed and the reason for backdating it. Learn more about VAT registrations for non-established entities.

VAT Registration Process

For backdated VAT registrations, the tax office will usually ask for proof of the Czech taxable transaction, for example an invoice, contract or marketplace evidence.

Typical supporting documents for a Czech VAT registration may include a business/trade register extract, ID copies of the legal representative, a signed power of attorney, proof of Czech taxable activity, and a bank certificate showing the account holder, IBAN/BIC and bank details. The tax office may also request VAT/incorporation certificates, existing EU VAT registration details, and Czech translations; exact requirements can vary by case.

For bank account evidence, the tax office will usually expect a formal certificate or confirmation issued by the bank; a scanned copy is often accepted, and in some cases a bank statement showing the company as account holder may also be accepted, whereas statements from some fintech providers may not be sufficient.

For foreign official documents such as the VAT certificate or trade/commercial register extract, Czech translations are often requested; unless stricter case-specific instructions apply, simple translations are usually sufficient and originals, notarisation or apostilles are generally not required.

In some cases, the Czech tax office or the case-specific checklist may require certain documents as originals, including one or more original signed powers of attorney, so clients should follow the exact filing instructions for their case.

If the authorities ask for existing EU VAT registration details, these may need to include the VAT number and registration date for each country of registration.

VAT number format in Czech Republic

• Country code: CZ
• Structure: CZ # # # # # # # # # #
• If you are registered for VAT in Czech Republic, the VAT number is formed using the country code CZ and 8 digits.
• In the case of an individual taxpayer, the tax identification number consists generally of the prefix “CZ” and 10 digits which form its identification number.

You can verify here Czech VAT numbers. Learn more about the VAT number format.

Fiscal representative requirements in Czech Republic

Some countries require all non-EU companies to appoint a fiscal representative when registering for VAT. However, this requirement does not apply in Czech Republic.

VAT special schemes in Czech Republic

Businesses may benefit from the following special VAT regimes:

Small businesses VAT registration exemption: this available only for established companies that do not exceed the CZK 2 million turnover of taxable supplies.

• Travel agents
• Margin scheme
• Investment gold

VAT groups in Czech Republic

VAT grouping is possible in Czech Republic for businesses established in the country. Group members must be closely bound by either financial or organizational links, so they may form a VAT group and be treated as a single taxable person for VAT purposes.

Concerning the VAT group conditions, financial links exist when the same person or business directly or indirectly holds at least 40% of the capital or voting rights. Organizational links exist when the management of the controlled entities is dependent of the controlling entity.

In addition, the following VAT grouping rules apply in Czech Republic:

• Only taxable persons having their seat, place of business or business establishment for VAT purposes can be part of a VAT group.
• VAT grouping is optional in Czech Republic and, once is formed, the group members are treated as a single taxable person. Application must be submitted before 31 October, so the grouping takes effect as from 1 January of the following year.
• Intra-group transactions are disregarded for VAT purposes.
• Every group member is jointly and severally liable for the VAT debts and penalties of the entire group.
• One of the members of the group is established as the group representative. This member becomes responsible for dealing with all VAT requirements for the whole group: including the submission of VAT returns and making VAT payments.

Art. 5a as well as Art. 95a of the Czech VAT Law regulate VAT grouping. Learn more.

Postponed import VAT accounting in Czech Republic

Czech Republic has introduced a postponed import VAT accounting mechanism where import VAT can be reported as input and output VAT (reverse charged) in the VAT return instead of being paid to the authorities upon importation. Postponed import VAT accounting applies automatically if conditions are met, basically, that the importer is VAT registered in the country. Taxpayers do not need to file a separate application.

If the importer is not VAT registered in Czech Republic in the moment of the importation, or violates the customs rules, import VAT is due.

Import VAT deferral, meaning delaying the payment of VAT for a given period, is also applicable in Czech Republic. VAT deferment accounts allow importers to pay import VAT and customs duties periodically, for a time period agreed with the relevant customs office.

Learn more about postponed import VAT accounting

Customs warehouse and VAT warehouse

Customs or bonded warehouses are available for goods that have not cleared customs in the EU (T1). VAT and excise duties are not due when these goods are directly placed in the Customs warehouse. As soon as they exit this regime, these amounts are due. Sales within the customs warehouse are zero-rated.

VAT warehouses are available for cleared goods (T2). These goods have already paid customs duties. The conditions are similar to those of Customs warehouses. The goods allowed are those included in Appendix V of the VAT Directive.

Consignment and call-off stock

The EU introduced a call-off stock simplification that all EU Member States must implement. This was put into place so that businesses that operate under a consignment stock structure do not have to VAT register in the country of destination. Czech Republic has introduced the consignment stock simplification.