Czech Republic: VAT changes effective January 1, 2025
The Czech Financial Administration announced several updates to VAT rules, with changes retroactively effective from January 1, 2025. The updates include modifications to cross-border VAT regulations, registration thresholds, taxation periods, and specific exemptions.
Key updates
- Cross-border VAT regime for small enterprises
Small enterprises can now apply VAT exemptions in other EU member states under the newly introduced cross-border VAT regime. - New turnover thresholds for VAT registration
Two new turnover thresholds have been established for VAT payer registration:- 2,000,000 Czech korunas (approximately US$82,006)
- 2,536,500 Czech korunas (approximately US$104,004)
- Quarterly taxation period option
VAT payers whose domestic turnover does not exceed 15,000,000 korunas (approximately US$615,026) now have the option to choose a quarterly taxation period. - Revisions to VAT group rules
The rules for VAT groups have been expanded and clarified, providing greater specificity regarding their application. - Extensions for corrections and modifications
- The deadline for correcting the tax base and tax deductions has been extended to seven years.
- Modifications were introduced for VAT exemptions, specifically for financial activities, education services, and the supply of books.
- Shortened tax deduction claim period
The deadline for claiming VAT deductions has been reduced to the end of the second calendar year following the year in which the right to deduct arose. -
Domestic reverse charge regime exemptions
Certain transactions, including forced sales, are now excluded from the domestic reverse charge mechanism.
Source: financnisprava.gov.cz
