czech_republic_vat
Summary

Standard VAT rate: 21%
E-Invoicing: mandatory
Real-time reporting: mandatory
Digital service tax: no

Compliance and rates

VAT number format

All EU member states have a fixed format for their VAT numbers. In the Czech Republic, it includes 8 numbers and the prefix CZ (i.e. CZ01234567).

VAT rates

The standard VAT rate in the Czech Republic is 21%, with reduced rates of 15% and 10% on certain goods and services.  A number of services are exempt from Czech VAT, such as intra-community and international transport.

21% (Standard) – Applies to all taxable supplies, with certain exceptions

15% (Reduced) – Selected foodstuffs (non-alcoholic beverages, on-demand food delivery products, water, medical equipment for disabled persons, tickets for sports events, etc.

10% (Reduced) – Selected foodstuffs (some baby and gluten-free food), pharmaceutical products and drugs, e-books, newspapers

0% (Zero) – Intra-community and international transport

VAT payments and returns

Czech Control Statements are supplementary filings to the regular monthly VAT return by the 25th of the following month. 

Both resident and non-resident VAT registered businesses must file Control Statements.

The data to be listed in Czech Control Statement includes:

– Domestic taxable supplies – sales invoices with CZ VAT included

– Domestic taxable purchases

– Transactions where the taxpayer is required to declare VAT under the VAT Act

Electronic submission

The Control Statement is uploaded online in an XML format. This enables the tax office to perform automated analyses of transactions, compare to the VAT return, and exchange data with other tax authorities.

Penalties in case of late filings or misdeclarations

Failure to submit the filing will result in a fine of CZK 1,000 to 500,000.

Invoice requirements

Invoices must contain at least the following information:

  • Date of issuance
  • A unique, sequential number
  • The VAT number of the supplier and customer
  • Full name and address of the supplier and customer
  • Full description of the goods or services provided
  • Details of quantities of goods, if applicable
  • Date of the supply if different from the invoice date
  • Unit price and any discount if the discount is not included in the unit price
  • The net, the taxable value of the supply
  • The VAT rate applied, and the amount of VAT (shown in CZK)
  • Details to support zero VAT – export, reverse charge or intra-community supply
  • Reference to any special scheme e.g. travel agents’ margin scheme, second-hand goods, art or antiques schemes.
  • The total, gross value of the invoice

Invoices issuance and storage

Czech VAT invoices must be issued within fifteen days following the tax point.  Invoices must be stored for ten years. The Czech Republic, like all EU member states, now permits the use of electronic invoices under certain conditions. The Czech tax authorities must be informed of the method and location of the invoice storage.

E-Invoicing

The Czech Republic introduced mandatory real-time electronic sales invoice issuance and reporting for all taxpayers from the 1st of May 2020. This obligation affecting only cash transactions made between Czech customers and taxable persons established in the Czech Republic. E-invoices must be issued in a prescribed format XML, confirmed by Czech Tax Authorities as a guarantee of authenticity.

All invoices must be issued within 48 hours from registered sale in order to be compliant with Czech Tax Law, otherwise, a seller will receive a penalty for late invoice issuance.

Real-time reporting

Real-time reporting to Czech Tax Authorities (EET) is mandatory for all taxable persons in Czech Republic from 1st of May 2020, for transactions paid in cash.

How does it work?

  1. Entrepreneur sends an XML data message about the transaction to the Financial Authority.
  2. Financial Authority sends back confirmation of receipt with a unique code (FIK – Fiscal Identification Code).
  3. Entrepreneur issues a receipt (including the FIK) and provides it to the customer.
  4. The customer receives the receipt.
  5. Registration of the sale can be verified through the web application of the Financial Authority. The customer can verify his/her receipt; entrepreneur can verify the sales registered under his name.

Who is affected by this obligation? 

Electronic invoices must be reported in real-time to Czech Tax Authorities for all cash transactions made between taxable persons established in the Czech Republic and Czech customers.

Turnkey invoice compliance.

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