Účetní s.r.o. was established in 1993 in Prague and currently there are three partners in the firm. Apart from accounting and payroll agenda services the company provides tax consultancy, audit, VAT representation and all range of tax compliance works. Our clients are individuals, small and medium size companies as well as large business groups.
|Name of the tax||Value added tax|
|Local name||Daň z přidané hodnoty (DPH)|
|Date introduced||1 May 2004|
|Date of membership in EU||1 May 2004|
|Administered by||Ministry of Finance (http://www.mfcr.cz/en/)|
Standard – 21%
15% – applied to the sale of certain goods such as food products, water supply, heat and cold and some services as public transport, tickets for sport and cultural events, health and social services;
10% – applied to the sale of some pharmaceuticals, contraception, nursing food, bakery products, printed books and periodicals;
Other – exempt with and without credit supplies: VAT exempt supplies without credit include basic postal services, television and radio broadcasting, insurance and financial services, transfer of some real estate, education, betting and gambling, social welfare.
VAT registration is obligatory for a business person who has a registered seat, place of business, or establishment in the Czech Republic (CR), if its turnover exceeds CZK 1.000.000 (EUR 36.600) in twelve consecutive calendar months. For distance sellers in the CR the threshold is EUR 35000.
Entities that have no seat, place of business, or a fixed establishment in the CR are obliged to register for Czech VAT once they render a taxable supply in the CR on which they have to account for a VAT. There is no registration threshold and these entities may register voluntarily too. A tax representative may be appointed by a non-Czech entity, but tax liability is always related to the entity.
Cancellation of VAT Registration – under specific situations, the tax authority may cancel VAT registrations, e.g. if the supplies in VAT returns filed for 12 consecutive months does not exceed CZK 1.000.000 and the taxpayer breaches VAT rules in a “serious manner”. A voluntary deregistration is also allowed if total supplies in VAT returns filed for 12 consecutive months does not exceed CZK 1.000.000 or in case of economic activities cessation.
VAT Number Format – CZ12345678
Filing and Payment – VAT returns must be submitted on a monthly basis; Under certain circumstances, VAT payer can opt for a quarterly period. However, quarterly period is not possible for VAT groups and taxable persons who exceeded the turnover of CZK 10,000,000 in the previous calendar year. Czech VAT payers who supply or receive transactions which are subject to local reverse-charge (e.g. construction and assembly works, waste and scrap) must file specific recapitulative statements on a monthly basis.
The VAT reporting and payment deadline is of 25th of the month following the fiscal period (i.e. month/quarter).
As from January 1st, 2016, the “review statement” (‘souhrnne hlaseni) will have to be submitted, in which taxpayers would file with their tax returns and in which they would give detailed information on local taxable supplies received and provided, based on individual tax documents.
VAT Cash Accounting System – VAT cash accounting system is not available in the CR.
Invoicing A Czech VAT payer must generally provide a tax document for all taxable supplies and VAT exempt supplies with credit made to another taxable person. The tax documents must be provided for rendering services, goods with installation and supplies of gas and electricity with a place of supply outside the CR. It must be also issued for every taxable transaction or tax-exempt transaction with a right of deduction involving a taxable person or a non-taxable person.
A tax document is necessary to support a claim for input tax deduction or a refund to a non-established business.
Intrastat Reporting – The obligation to file Intrastat reports arises on exceeding the stated threshold for goods arrival (CZK 8M) or dispatches (CZK 8M).
The INTRASTAT report period is monthly and reports must be submitted to the competent customs authorities by the 10th working day of the month following the calendar month to which they relate if submitted in paper form, or by the 12th working day of the month following the calendar month to which they relate if submitted electronically. Submission in paper form is allowed in specific cases only.
EORI Registration – Provided that the company imports goods in the Czech Republic it needs to obtain an EORI number from the customs authorities. In most of cases, EORI number is identical to tax identification number.
VAT Grouping – The VAT Act provides the option of VAT grouping. VAT group generally consists of related entities with an address, a place of business or a branch in the Czech Republic. VAT grouping should simplify administrative procedures related to filing VAT returns within group companies and minimize non-recoverable VAT.
VAT Refund – VAT can be recovered by businesses registered for the Czech VAT on all goods and services used by them within the framework of their economic activities. However there are certain exceptions, when VAT is not deductible due to their character (restaurant and other private expenses, gifts with an acquisition cost exceeding CZK500) or because of their use for e.g. provision of exempt supplies without credit.
A non-established VAT payer may request a refund of Czech VAT by filing an application through the electronic portal in its country of establishment. The application must be completed in the Czech language. The minimum claim period is three calendar months, while the maximum claim period is one calendar year. Applications for a refund must be submitted within nine months after the end of the calendar year to which they relate, that is, by 30 September of the following year.
The minimum claim for a period of less than a year but not less than three months is EUR 400 (an equivalent in CZK). For an annual claim or for a remaining period of the year the minimum amount is EUR 50 (an equivalent in CZK). The tax authorities must decide on the VAT refund application within four months after the date on which the claim is submitted or within two months after the submission of the additional information that is requested by them.
©TRA – Tax Representative Alliance