Get free access to
Our legislation updates make it easy for you to keep on top of the latest changes affecting your business. Receive our articles, opinions, tips, industry news, country profiles, regional overviews and studies, latest events and even more, directly into your mailbox.
Check out our Newsroom to see what is included!
We will send you only relevant information we consider may be of your interest and treat your personal data in compliance with our Privacy policy and GDPR statement.
Unable to subscribe? Try this page.
Let us remind you that the deadline for group VAT registration in the Czech Republic is approaching. The VAT group becomes VAT payer from January 1st, 2025 if the application for VAT registration is submitted no later than October 31st, 2024.
In case that the VAT application is submitted later, the VAT group will be registered for VAT not earlier than January 1st, 2026. The same rule applies for the eventual addition of a new member to the VAT group or exit a member from the VAT group.
The VAT group is a specific group of related companies that is treated as one taxpayer for VAT purposes, i.e. supply provided between members of the VAT group is not subject to VAT. The VAT group registration is commonly used by related companies where there is mutual invoicing and for some reason, it is not possible to claim full VAT deduction. When deciding to create VAT group it is necessary to take into account the nature of the supplies that will be provided by the VAT group as a whole (i.e. to the third parties) and its impact on the potential obligation to shorten the VAT deductions. It is thus important to consider whether the positive effect of VAT group registration will not be outweighed by the negative effect caused by the partial VAT deductions. Every decision to register as a VAT group should be preceded by a specific analysis.
Are you considering whether voluntary group registration for VAT purposes is the right solution for you? We will be happy to analyse your company’s situation and arrange everything you need – from setting up a VAT group through all the administration to processing your VAT return. Do not hesitate to contact our Czech VAT team.
Are you registered for VAT in the Czech Republic and have your employees incurred transportation expenses (e.g. taxi fares, public transport fares, fuel, and road tolls), accommodation expenses and expenses for professional training in relation to business trips? Did your company purchase goods in another EU Member State and the goods remained in the territory of the respective EU Member State? Does your company present itself at trade fairs and exhibitions in other EU Member States?
In such a case, we would like to inform you about the possibility to apply for a VAT refund from other EU Member State in the Czech Republic, paid on goods and services in another EU Member State through an electronic VAT refund application when meeting the specific conditions of respective EU Member State.
VAT refund application for VAT refund period shall be submitted by 30th September of the calendar year following the “VAT refund period” (i.e. deadline for submitting the VAT refund application for the calendar year 2023 is on the 30th September 2024).
The period for VAT refund from other EU Member State in the Czech Republic shall not exceed one calendar year but shall not be less than 3 calendar months; a VAT refund application may be submitted for a period less than 3 calendar months in case that the VAT refund period represents the remainder of the calendar year.
If you are interested in our professional assistance in this respect, please do not hesitate to contact us! We will be pleased to assist you.
Are you obligated to register for VAT in the Czech Republic? We have summarized some useful information that can help you during the VAT registration process.
Foreign companies may face difficulties right at the beginning of the process. The first reason is to register for VAT in the Czech Republic the applicant has to use an electronic form – either through a data box or a verified electronic signature. However, it is difficult for companies that were not established in the Czech Republic to obtain these. The foreign company, therefore, needs a representative in the Czech Republic who will represent the company and, based on a signed power of attorney, arrange the registration for Value Added Tax (VAT) or VAT One Stop Shop (OSS) on its behalf.
Another barrier may be the language. The official language of the Czech tax authorities is solely Czech, therefore all communication and documents must be in Czech. It is the duty of the aforementioned representative to ensure professional communication with tax administrators, including answering any additional questions and mitigating doubts.
In general, to register for VAT in the Czech Republic, you will need the following documents:
The processing of VAT registration by the tax authorities takes approximately 3 to 6 weeks (usually the tax authorities have additional questions during the VAT registration process). The process does not end with registration itself. The company must then take care of the related obligations – regular filing of Czech VAT returns, Intrastat reports or customs declarations.
Due to the volatility and regularly excessive requirements of the Czech tax authorities, we are here to assist you and ease the Czech VAT registration process for you. Benefit from an individual approach and let our tax professionals handle all your matters. We are able to reduce the VAT registration process to less than two weeks, while acting in your best interests.
Our services include:
Our tax specialists have experience with countless VAT registrations per year and will be happy to arrange VAT registration for you as well. If your company is obligated to register for VAT in the Czech Republic and you are looking for a reliable advisor, do not hesitate to contact our team.
Is your company registered to VAT and has it purchased goods in the UK that have remained in the territory of this country? Do your employees travel to Great Britain on business trips and does your company cover the costs associated with transport, accommodation or professional trainings? Does your company participate in exhibitions or fairs in the United Kingdom?
In this case, we would like to inform you about the possibility to apply for a refund of VAT paid for goods and services. Even after Brexit, i.e., the exit of Great Britain from the European Union (from 1 January 2021), it is possible to apply for a refund of VAT paid in the UK based on the reciprocity principle. However, the application is no longer submitted via the portal of the Czech tax authority, but directly by the British Financial Administration (HMRC).
The conditions for a tax refund from the UK remain similar to when claiming a refund from other EU member states. At the same time, there are several differences which are summed up below.
The period for UK VAT refund is from 1 July of a given year to 30 June of the following year and thus amounts to 12 calendar months. The application can be submitted at least for 3 calendar months.
An application for a UK VAT refund for the tax refund period must be submitted no later than on 31 December of the year in which the refund period ends. The application deadline for the period from 1 July 2022 to 30 June 2023 is therefore on 31 December 2023.
If you are claiming tax for a period of less than 12 months, the minimum claim amount must be at least £130.
We will be pleased to assist you in the VAT refund process and provide everything you need. Do not hesitate to contact us!
The United Kingdom (UK) left the European Union on 31 January 2020. In accordance with the Withdrawal Agreement, it is now officially a third country. The UK however is currently still operating on the single market and customs union. The transition period will probably last until 31 December 2020. Therefore, it is necessary to prepare for application of different VAT and custom rules regarding the UK.
Brexit will affect your company in the Czech Republic if:
In practice, there will be changes in the following areas.
We would like to inform you that from 2020 the application of VAT for cross-border EU-trade has underwent significant changes. These are known as quick fixes in VAT for the Czech Republic, a set of transitional measures that will be applicable until a final VAT system is established within the EU.
As of 1 January 2020, all EU Member States were obliged to implement quick fixes into their national legislation in connection with the amendment to the European VAT Directive. These “quick fixes” are intended to contribute to the harmonization and simplification of VAT rules on intra-EU trade in goods.
Quick fixes focus on:
In December 2019, the amendment to the Czech VAT Act in relation to quick fixes advanced to the second reading in the Chamber of Deputies. Its effectiveness can thus be expected from 1 April, 2020.
The VAT news for 2020 represents one of the most fundamental changes in recent years. These are adjustments that affect all manufacturing and trading companies delivering and acquiring goods within the EU.
In order to apply correct VAT treatment of cross-border transactions, it is necessary to bear in mind the interdependence of the changes that quick fixes bring. Related jurisprudence of the Court of Justice of the EU must also be taken into account.
We recommend paying attention to the following topics:
The given area is undergoing changes effective throughout the EU. The new “call-off stock” regime will be mandatory if all the conditions are met. Therefore, please pay attention to the new regime even if you are not primarily interested in the application of the simplified approaches.
In case of cross-border chain of supply of goods, each transaction in the chain needs to be thoroughly analyzed to determine whether it represents local delivery or a ‘movable’ cross-border transaction that may be exempted from VAT. In this regard, the setting of the INCOTERMS conditions will continue to be of key importance. Their setting needs to be taken into account in the context of the new rules for the ‘assignment of transportation’, which aim to clearly identify the nature of the transaction in the chain. The erroneous application of VAT resulting from the incorrect application of the settings of delivery conditions and incorrectly determined nature of the transaction is often the subject of considerable retroactive VAT assessments.
The conditions for exemption from VAT when delivering goods to Another Member State will be more strict. In order to apply the exemption, it will be necessary for the provider of the goods to obtain the customer’s valid VAT number at the defined time and to report such delivery in the EU Sales List properly.
Transportation of goods supplied to Another Member State would be proven in the form of “rebuttable presumptions”. The entity claiming the VAT exemption needs to have specific documents required by the EU Council Regulation at its disposal. The fulfillment of such conditions may cause considerable difficulties for the VAT payer.
Our VAT experts would be glad to discuss all of the aforementioned areas in more detail.
The amendment to the VAT Act changes, among other, the VAT treatment of undocumented shortages and damages in the Czech Republic, including losses or thefts of business assets. In case of undocumented shortages, damages, losses or thefts of business assets, the VAT Act introduces the duty to settle the entitlement to input VAT deduction originally claimed. The adjustment shall be made within the period in which the taxpayer discovered such circumstances or could discover them, for example through goods inventory. The time period for which such adjustments are required is 3 years with respect to inventories and low-value assets and 5 (10 respectively) years with respect to fixed assets.
We would like to stress that if shortages and damages are supported with proper documentation (e.g. natural shortages), the treatment remains the same regardless the amendment to VAT Act, i.e. there is no need to adjust the originally claimed VAT deduction.
In case your company performed goods inventory in July, it is obliged to settle the originally claimed VAT deduction upon purchased goods / material within the July VAT return which is to be filed by August 25, 2017.
About Accace
Accace is a proactive consultancy and outsourcing partner who bridges the gap between needs and solutions. Combining smart and streamlined technology with a holistic approach, we provide an all-round care to clients and consider their matters as our own. With over 800 experts and more than 2,000 customers, we have vast experience with facilitating the smooth operation and growth of small to large-scale, global businesses.
About Accace Circle
Accace operates internationally as Accace Circle, a co-created business community of like-minded BPO providers and advisors who deliver outstanding services with elevated customer experience and erase the borders of service delivery. Covering over 50 jurisdictions with nearly 2,500 professionals, we support more than 15,000 customers, mostly mid-size and international Fortune 500 companies from various sectors, and process at least 200,000 pay slips globally.
