VAT in Czech Republic guide

VAT rates

The following are the VAT rates:

• Standard rate: 21%
• Reduced rates: 15%, 10%
• 0% (zero-rated or exempt with credit).

The standard rate of VAT applies to all supplies of goods or services, unless a specific measure provides for the reduced rate or exemption.

Czech VAT for digital service providers

In case of digital services, telecom services or broadcasting services supplied in a B2B context, the place of supply is the place where the recipient is established. No Czech VAT should be charged, and reverse charge applies unless supplier and customer are established in Czech Republic. In case of digital services, telecom services or broadcasting services supplied in a B2C context we refer to the section on the One-Stop Shop below for more information.

One-Stop Shop

On 1 July 2021 EU has introduced a so-called “One-Stop-Shop” (OSS) system which has replaced a previously applied “MiniOneStopShop” (MOSS) system. OSS has extended the scope of MOSS from digital goods and services to all goods and services sold B2C in the EU. OSS is an electronic portal that simplifies VAT compliance for online sellers, i.e., online businesses that sell goods and/or services in the EU are now only required to register for VAT in one EU country for all their B2C sales in the EU. If such sellers’ B2C sales in EU are above the applicable threshold, which is 10.000,00 EUR throughout the EU, businesses are liable to charge, collect and remit VAT in the Member State where their B2C buyers are located, instead of the Member State or country of their incorporation, i.e. online sellers have to apply the VAT rate of the Member State where the goods are dispatched or where the services are supplied. AS each EU Member State has an online portal where businesses can register for OSS and submit their VAT returns in one Member State for their B2C sales throughout the EU, it is estimated that VAT compliance costs will be significantly reduced. Registration in the OSS system is available for both – taxable persons established in the EU and outside the EU.

VAT Registration in Czech Republic

The obligation for VAT registration in Czech Republic might be triggered in different ways. Here is the the list of most common scenarios:

• Importing goods into Czech Republic from non-EU countries;
• Buying and selling goods in Czech Republic (excluding domestic reverse charge);
• Selling the goods from Czech Republic to customers in other countries (B2B or B2C);
• Acquiring goods in Czech Republic from another EU country (Intra-community acquisitions);
• Holdinging and storing inventory in Czech Republic for selling, distribution or consignment;
• E-commerce sales of goods to Czech Republic consumers, subject to Distance Selling VAT registration thresholds;
• Organising events in Czech Republic where attendees or delegates are paying admission.

Late – registration penalties

If a taxable person fails to register for VAT, it will be registered retrospectively. The tax authorities can impose a penalty for breaching non-monetary obligations. Moreover, they would assess sanctions if VAT returns and VAT ledgers are filed late or if payments of VAT liability are late.

Fiscal representation Czech Republic

The business which are selling in Czech Republic do not have an obligation to appoint a fiscal representative in Czech Republic.
1StopVAT can provide Global VAT/GST/Sales tax compliance services.