The Czech Republic joined the European Union in 2004. The country is not a member of the Eurozone, despite various plans to become one, and the country trades in the Czech Koruna.
VAT rates in the Czech Republic
The standard rate of VAT is 21%, and a reduced rate of 15% is available.
VAT registration in the Czech Republic
The VAT registration limit for established businesses is CZK 1,000,000, although it is zero for non-established businesses.
Distance sales have a limit of CZK 1,140,000 for VAT registration.
The format for a Czech VAT identification number is: CZ 12345678. Every company must hold a number like this in order for accurate taxation.
VAT returns are dependent on turnover; companies with turnover in excess of CZK 10 million must file VAT returns monthly, and companies with turnover below CZK 10 million must file returns quarterly. Non-established businesses are required to submit returns every calendar quarter. No annual returns are required.
Are there any Intrastat thresholds in the Czech Republic?
Yes. There is a limit of CZK 8,000,000 for both dispatches and arrivals.
VAT recovery in the Czech Republic
- Is VAT recovery permitted for non-established non-EU businesses?
Yes, although it decided by reciprocity. If the business was established in a country that refunds VAT to Czech VAT payers, VAT recovery is allowed.
- Are there any non-VAT recoverable expenses?
Yes, goods or services that are supplied to non-resident taxable persons or companies, i.e. hotels, cannot recover VAT.
Reverse charge applies to the majority of cross border services. Czech VAT registered customers can account for VAT under the reverse charge if supplied goods and services by a non-established business.
Requirements and regulations in the Czech Republic
There are no requirements for fiscal representatives in the Czech Republic – this position is not recognised.
Use and enjoyment rules apply in Czech Republic to items such as telecommunications services and hire of means of transport.
The period of VAT recovery by tax authorities has a timescale of 3 years. This is the same for deductions and refunds.
Please contact us for further information about Czech taxation and a member of our team will be happy to help you.