Czech Republic

The basics

VAT in the Czech Republic is known as DPH (Daň z přidané hodnoty). The standard rate is 21%, while the reduced rate of 12% applies to a broad range of goods and services, including foodstuffs such as baby food and gluten-free products, water supplies, non-alcoholic beverages, agricultural products, admission to cultural events, restaurant and catering services, pharmaceutical products, books including e-books, newspapers and periodicals, and domestic passenger transport. A zero rate applies to intra-community supplies and international passenger transport.

VAT registration

Businesses based in the Czech Republic with an annual turnover exceeding CZK 2 million are required to register for Czech VAT. For non-resident companies, there is no registration threshold, meaning registration is required from the first taxable activity.

Following the EU’s removal of country-specific distance selling thresholds in July 2021, the Czech Republic, like all other EU member states, now applies a unified threshold of €10,000. Registration for VAT is required if annual turnover from cross-border sales exceeds this amount, if products are stored within the country, or if the business participates in an FBA programme (Fulfilled-by-Amazon) that includes the Czech Republic.

Businesses established in the Czech Republic can apply for a Czech VAT number through their local tax office, while non-resident companies should apply through the Financial Office for the Capital of Prague. The registration process typically takes three to four weeks and must be completed in the Czech language.

Fiscal representative

Neither EU nor non-EU businesses selling to customers in the Czech Republic are required to appoint a fiscal representative.

VAT returns and penalties

Businesses in the Czech Republic are generally required to file VAT returns on a monthly basis. However, small businesses with revenues of less than CZK 10 million over the previous two years may file quarterly instead.

The deadline for both VAT return submission and payment is the 25th day of the month following the reporting period. All filings must be submitted electronically via the Financial Administration of the Czech Republic.

Late filings can result in penalties of up to CZK 300,000. Late payments incur an interest charge of 14% per annum on the outstanding amount, calculated on a daily basis. Misdeclarations are subject to a fine of 20%.

Intrastat declarations

Both resident and non-resident businesses in the Czech Republic must submit Intrastat returns if their annual turnover for the movement of goods exceeds CZK 12 million for arrivals or CZK 12 million for dispatches. Declarations must be submitted electronically by the 12th working day of the month following the reporting period. Late filings may result in penalties of up to CZK 50,000.

Reverse charge

The reverse charge mechanism in the Czech Republic applies to EU cross-border supplies and certain domestic transactions, transferring the responsibility for reporting and paying Czech VAT from the supplier to the recipient. This mechanism streamlines transactions and reduces the need for foreign suppliers to register for VAT in the Czech Republic.