The introduction of new e-commerce regulations on July 1, 2021 with the abolishment of the intra-EU distance selling thresholds, superseded the previous distance selling framework that was in place until June 30, 2021.
Under the old system, the EU distance selling threshold for the Czech Republic was set at CZK 1,140,000.
Learn all about eCommerce and B2C services in the Czech Republic in our comprehensive guide below.
According to the Czech Republic’s VAT Act, specifically Article 14, services generally include any activity that does not qualify as a supply of goods. Services encompass a variety of activities, such as:
For instance, services can range from transferring rights to offering food and beverages in establishments like hotels, restaurants, and cafes. It’s important to note that transferring a business as a going concern or selling personal receivables (as opposed to those bought from others) is not categorized as a service for VAT purposes.
Additionally, Article 14 defines certain activities as ‘Deemed Supplies of Services’, which include:
In 2019, the Czech Republic’s government sanctioned the introduction of a tax on digital services.
Digital services refer to those that are electronically stored, transmitted, and used. Consumers can access these services via email, online downloads, or website logins. These services are characterized by minimal human involvement and a significant reliance on information technology.
Examples of digital services include:
Digital services are considered to be provided in the location where the tax-free recipients, whether inside or outside the EU, are established or have their permanent residence.
The European Council Implementing Regulations have laid down guidelines to deduce the recipient’s location for ascertaining the place of supply for digital services as per EU regulations:
In all other instances, the provider should typically use two consistent indicators to determine the location of the customer’s office registration, registered domicile, or usual residence. These indicators can include:
Moreover, from 1 July 2021, a unified EU-wide “One Stop Shop” (OSS) system has been in place, simplifying the registration and reporting processes for foreign e-commerce providers of goods and services, effectively replacing the MOSS scheme.
Last Updated: 06/12/2023
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