Czech Republic VAT information: rates, registration number

VAT Standard rate

The standard VAT rate in the Czech Republic in 2023 is 21%.

VAT Reduced rate

15%

Foodstuffs (excluding essential child nutrition and gluten-free food);
Non-alcoholic beverages;
Take away food;
Water supplies;
Medical equipment for disabled persons;
Children’s car seats;
Some domestic passenger transport;
Admission to cultural events, shows, and amusement parks;
Writers and composers;
Social housing;
Renovation and repair of private dwellings;
Cleaning of private households;
Some agricultural supplies;
Hotel accommodation;
Admission to sporting events;
Use of sporting facilities;
Social services;
Supplies to undertaker and cremation services;
Medical and dental care;
Domestic care services;
Firewood; some pharmaceuticals;
Some domestic waste collection and street cleaning;
Treatment of waste and wastewater;
Food provided in restaurants and cafes;
Cut flowers and plants for decorative use;
Writers, composers, and food production.

10%

Foodstuffs (selected baby food and gluten-free food);
Newspapers and periodicals;
Some pharmaceutical products;
Some books (including e-books).

See the summary of the EU VAT rates

Thresholds

From the 1st of July 2021, the distance selling thresholds were withdrawn and replaced by a unified threshold of €10,000 for all EU members.

In other words, VAT should be charged at the VAT rate of the customer’s country of residence by companies whose annual taxable cross-border turnover is over €10,000.

Deductible VAT

If goods or services were used to make taxable supplies in Czech, VAT in input invoices might be credited. Examples include:

VAT paid at custom clearance with your EORI number;
VAT paid to Czech suppliers.

Registration procedure

The taxable person that does not have a registered office in this country and fulfills conditions for compulsory registration is obliged to submit an application for registration within 15 days from the day when this person became a payer or an identified person.

The day when this taxable person becomes a payer is usually the day:

When the first taxable transaction with the place of supply in this country takes place, this includes also transactions under the distance sale scheme;
The day of the first delivery of goods from this country to another Member State.

The day when this taxable person becomes an identified person is the first day of the intra-community acquisition of goods from another EU Member State.

All applications for VAT registration (compulsory or voluntary) or a notification of changes to the registration data must be submitted only electronically. Compulsory annexes for non-established taxable persons are:

VAT (or similar tax) registration certificate from another country;
Trade license/certificate or other authorization to business activity;
Business register statement;
If the company is appointing a local tax agent or Fiscal Representative, then a Letter of Authority or Power of Attorney is.

All these annexes must be officially verified copies of original documents translated into the Czech language.

Tax representative

There is no need for non-EU businesses to appoint fiscal representatives in order to handle all formalities related to VAT registration and filling.

Keeping records

Payers or identified persons are obliged to keep all data relating to their tax liabilities in records for VAT purposes and must do so in the structure required for drawing up a tax return, recapitulative statement, or control statement.

VAT payment date

The tax is due on the last day of the deadline set out for the submission of a regular VAT return.

Filing VAT returns

Deadline: no later than the 25th day after the end of the tax period, which is:

Calendar month – basic tax period;
Calendar quarter – only a VAT payer (not an identified person) can decide that his.

The tax period for the current calendar year is a calendar quarter on specific legal conditions. The change of tax period cannot be made for the calendar year in which the VAT payer was registered or for the immediately following calendar year.

VAT standard rate

The standard VAT rate in the Czech Republic in 2023 is 21%.

VAT Reduced rate

The reduced rate is 10% for digital books.

Thresholds

Companies incorporated or having a permanent establishment in the EU can use the rules for low annual turnovers. In this case, the threshold is €10,000.

Companies established outside the European Union cannot benefit from the intra-EU threshold. The threshold for registration for companies outside of the EU is zero. It means that they are obliged to register from the first sale. Such businesses may register for non-Union OSS instead of registration in Belgium.

The threshold for VAT registration for local businesses is CZK 258,000 (€10,800).

Pieces of evidence

There is a list of basic criteria to determine the location of the buyer. It is extremely important for determining tax obligations.

Customer’s permanent address;
Billing address (bank or electronic payment operator);
Internet Protocol (IP) address;
Telephone number;
The location of the customer’s fixed landline through which the service is supplied to him;
Other commercially relevant information.

And if two of them are in the Czech Republic, the customer may be determined as Czech.

E-services list

A digital product is any product that is stored, delivered, and used in an electronic format. A customer can receive these goods or services by e-mail, downloading them from the Internet, or logging into a website. In particular, the law names the following as digital services:

Electronic books, images, movies, and videos, whether buying a copy from Shopify or using a service (for example, Amazon Prime). In tax materials, these products are referred to as “Audio, visual or audiovisual products”;
Downloadable and streaming music, whether buying an MP3 or using music services;
Cloud-based software and as-a-Service products (SaaS, PaaS, IaaS);
Websites, site hosting services, and Internet service providers;
Online ads and affiliate marketing.

Registration procedure

To register, you need to fill out a registration application. To do this, you will need the following information about the company:

Full information about the company:
Company’s name, a trading name of the company (If applicable), full postal address, email address and website of the taxable person, name and phone number of the contact person;
National tax number (If applicable);
Country in which the taxable person has his place of business;
International bank account number or OBAN number and BIC;
An electronic declaration that the taxable person is not registered for VAT within the Union;
Date of commencement of using the scheme.

Document in a language other than Czech must be presented in the original wording together with its Czech translation.

Tax representative

Sellers selling digital services are not obligated to appoint a tax representative in the Czech Republic.

Keeping records

The retention period of Tax documents for VAT is 10 years – the tax authorities have the right to request them.

Filling VAT returns

The standard reporting period in the Czech Republic is a month. Legal persons have to submit the VAT Control Statement no later than the 25th day after the end of each month.

For example, the VAT return for February must be submitted by 25 March at the latest.

VAT payment date

The deadline for payments is the 25th of the month following the reporting month.