Who must pay the VAT in Czech Republic?
The VAT registration
must be done by companies importing goods from the EU in the Czech Republic
. Buying and selling products in this country are subject to VAT. The same tax rate is applicable to clients outside the Czech Republic who purchase products or services from this country. Intra-community acquisitions are also subject to VAT taxation
. Companies having distance selling operations must align with the VAT requirements in Czech Republic
Also, companies holding inventory with the purpose of distribution or sale of the stock must pay VAT. The admission for varied events in the Czech Republic must comprise the VAT rate. One should solicit information about the VAT in Czech Republic and respect the applicable legislation in this sense. Feel free to talk to one of our advisors and find out more about the VAT in Czech Republic.
Registration for VAT in Czech Republic in 2022
The registration for VAT in Czech Republic
can be made as soon as the company is incorporated in this country. The process is not complicated and the legal representative of the firm must commence the process with the entitled authorities. Among the needed documents for VAT registration in Czech Republic
, we mention the Certificate of Incorporation of the company that comprises important information about the firm.
Also, specific forms need to be completed with the financial authorities, but for more details and in-depth support for registration, you can talk to one of our specialists. They can tell you more about the VAT rules for 2022. We present you other facts to consider about the VAT registration in Czech Republic, mentioning that one of our experts can help company owners by managing all the formalities:
- The VAT registration is imposed on companies exceeding the CZK 1 million turnovers in one year.
- Voluntary VAT registration can be made even if the threshold is not exceeded.
- The Czech VAT registration is made in approximately 2 months. However, the process can speed up if all the documents are provided in time, helped by our specialists.
- DIC is the VAT number allocated to companies in Czech Republic. This code shows that the firm is registered for taxation in this country.
The VAT registration in Czech Republic can be handled in a professional manner by our advisors.
The VAT generalized reverse charge to be introduced
The Generalized Reverse Charge Mechanism on domestic supplies has been accepted by the financial authorities in the Czech Republic, mentioning that if approved by the European Commission, the mechanism will be soon introduced. This is considered an important anti-VAT fraud measure.
If at the moment the cash payment of VAT imposed on goods and services can be withdrawn for B2B transactions of more than EUR 17,500, the client can report the VAT input and output as a book-only entry for the VAT return. If this measure will be implemented, the Czech Republic
will be the first country to introduce the Generalized Reverse Charge Mechanism
or GRCM in the European Union.
The invoice provided after the sale of products and services in the Czech Republic must include the following information:
- Company name and business address.
- Tax ID number of the company.
- Unique identification number of the business.
- The type of products and/or services sold, as well as a short description.
- The price of the respective products and services, before VAT.
- The price of the respective products and services with VAT included.
- The total amount due.
There are specific programs and software with which companies can issue invoices. We remind you of the support of our Czech lawyers
who can help you with the formalities for VAT registration in the Czech Republic
What is Intrastat reporting in Czech Republic?
Intrastat reporting is mandatory for the movement of goods with partners from other EU countries. There is also a threshold set in this regard and it is CZK 12 million for imported and exported goods for a period of one year, and once exceeded, Intrastat reporting in Czech Republic is required. As you have to prepare a series of documents and assessments, as well as collaborate with the relevant authorities, we recommend you get in touch with our local lawyers for legal consultancy in the tax field.
Representation before tax authorities
There may be litigation cases referring to taxation and reclaiming Czech VAT for which specialist advice is needed. With the help of our Czech lawyers, the company you own can be represented before the tax authorities. They can request tax audits and ask a series of questions regarding VAT payments and more.
But in order to be prepared in this regard, we suggest you collaborate with our specialists to benefit from legal support and assistance in resolving disputes of this kind.
Reclaiming foreign VAT as a Czech company
from another EU member state can be done if you have a company registered in Czech Republic
. A VAT refund can be requested for accommodation, transportation, and the purchase of goods and services in another member state.
Making investments in Czech Republic
The Czech Republic is a destination appreciated by foreign investors who discover the potential of this country. Being one of the most developed countries in Europe, the Czech Republic already hosts an impressive number of companies with foreign capital, which benefit from a strong and protected business climate. Among the advantages offered we mention the affordable costs for the competitive labor force, the incentives for investments, the permissive legislation both for foreigners and for the local entrepreneurs, but also the advantageous taxation regime.
The tourism sector, the real estate field, the manufacturing, the agriculture, and the retail sectors are among the well-developed in the Czech Republic
, and fields in which numerous investors generate large profits. The highly skilled workforce, the low operational costs, the stable economy, and the appealing tax structure also stand and the base of the decision of making investments in the Czech Republic
. The following facts and numbers outline more the business direction in this country:
- around USD 155,024 million was the total FDI stock for Czech Republic in 2018;
- world Bank Ranked the Czech Republic 35th out of 190 economies in the world;
- the Czech Republic is considered the second largest FDI recipient in Central Europe;
- Austria, Germany, the Netherlands, and Luxembourg are the main investors in the Czech Republic;
- the visa scheme was introduced in 2018 for non-EU citizens who make investments of at least EUR 1.9 million.
FAQ about Czech VAT
1. What is the VAT rate in Czech Republic?
21% is the standard VAT rate in Czech Republic. This rate applies to most products and services available for sale purposes. The VAT rate of 15% applies to public transportation, water, foodstuff, hotel accommodation, cultural and sports events. A reduced VAT rate of 10% is imposed on different food products for children, and pharmaceuticals.
2. Who needs to register for VAT in Czech Republic?
Companies exceeding the threshold of CZK 1 million must be registered for VAT purposes in Czech Republic. The formalities of the registration for taxation in this country can be handled by our Czech lawyers. Both domestic and foreign companies must be registered for VAT in this country.
3. Is VAT necessary for operations within EU countries?
Yes, it is mandatory to register your Czech company for VAT before starting the activities, whether in the country or outside the borders. Moreover, the EORI number that comprises the VAT code is required for trading operations within the EU countries. You can solicit our legal advice on this topic.
4. Can the VAT registration be made online in Czech Republic?
Yes, there is the possibility of VAT registration online, helped by one of our advisors with experience in this field. All the formalities for registration can be attentively handled by us.
5. What is the format of the VAT number in Czech Republic?
The VAT number is formed of CZ, the country code, plus 8 digits. The financial authorities in Czech Republic
issue the VAT number.
6. Is there a VAT number for international or intra-community transport?
No, the Czech Republic does not impose a VAT for such transport. We remind you that we can assist foreigners in VAT registration in this country.
7. How does a company comply with the VAT Registration in Czech Republic?
The VAT is normally mentioned by an invoice. There are different VAT rates for varied categories of products and services in Czech Republic.
8. What types of reports are required for VAT in Czech Republic?
According to the tax legislation in Czech Republic, there is no need for quarterly VAT reports for the first 2 years of the company. After this period, monthly reports are imposed, but no later than the 25th of each month.
9. Does a company needs to keep accounting records?
Yes, there is an obligation of keeping the accounting records for at least 10 years in the firm, if the company is not suspended.
10. How can a Czech lawyer help me with the VAT registration?
An experienced Czech attorney can help both local and foreign company owners properly register for VAT. Different requirements must be fulfilled, so an expert in the field is needed for VAT registration in Czech Republic, in compliance with the applicable laws.