VAT Returns & Recovery in the Czech Republic
Czech VAT returns must be filed within 25 days after the end of the relevant tax period. VAT payers may request to file their returns on a quarterly basis, provided they meet the certain conditions. There are three VAT reports that must be completed and submitted in the Czech Republic.
Beyond submitting VAT returns, businesses are also required to provide details through EU sales listings and the VAT Control Statement, though the frequency of these submissions may vary.
Learn all about VAT returns in the Czech Republic in our comprehensive guide below.
VAT Returns
in the Czech Republic
As mentioned above, there are three VAT reports that must be completed and submitted in the Czech Republic.
- Přiznání k dani z přidané hodnoty – VAT return.
- Souhrnné hlášení VIES – EC Sales List.
- Kontrolní hlášení DPH – Cumulative Statements (VAT Control Statement).
Regarding the reports and the ESL and VAT control statement depending on the specific business situation, sales, purchases, and the flow of goods within Europe, it might only be necessary to submit certain parts of these documents. All the required forms and documentation can be filled out and submitted via the Czech Tax Administration’s online portal.
Frequency of Filing
All Czech VAT registrants must electronically file VAT returns, either monthly or quarterly:
- Monthly submissions are the standard practice.
- Quarterly submissions are allowed for businesses with a turnover under CZK 10,000,000. However, VAT groups and newly registered VAT payers within their first two years cannot file quarterly.
Filing Deadlines
VAT reports and payments are due 25 days following the end of the respective return period. If this due date is on a weekend or public holiday, it is moved to the next working day.
Mandatory Electronic Filing
In the Czech Republic, the VAT Law mandates electronic submission for all VAT filings. Additional documents like Control Statements also need to be electronically filed in the prescribed format and structure to be considered valid.
Interest and Penalties
To calculate the interest charged on underpaid VAT, the statutory rate is determined by taking the REPO rate of the Czech National Bank on the first day of the relevant half-year and add 14% to it.
If individuals do not fulfill their VAT-related responsibilities such as submitting accurate returns, Czech Tax Authority has the tight to impose penalties.
Selling in Czech Republic?
VAT Recovery in the Czech Republic
Every individual subject to VAT is obligated to submit a VAT return, detailing all relevant information for calculating the due tax and applicable deductions. Taxpayers have the potential to lower their total tax liability, possibly to a negative amount, by reclaiming input VAT on their purchases.
To qualify for input VAT recovery, specific criteria must be satisfied:
- Both the importer and exporter involved in the transaction must be registered taxpayers.
- The imported goods should be intended for business use within a span of three years.
- The recipient must possess the required documentation to justify the input tax.
- The input tax should be associated with taxable supplies or exempt supplies eligible for recovery.
Tax credits for input tax can be claimed up to three years from when the right to claim arises.
A VAT-registered individual with long-term assets can deduct VAT incurred up to 60 months prior to becoming a taxable person, provided that the assets remain usable.
Additionally, under certain conditions, a VAT-registered person may also deduct VAT on other supplies incurred in the 12 months preceding their registration as a taxable person.
Exempt Supplies or Equivalent
“Exempt supplies” are supplies of goods and services that are not considered taxable supplies and are therefore not subject to VAT. As a result, taxpayers are unable to claim an input VAT deduction for any VAT-related expense incurred.
Among the supplies that are exempt from VAT without input VAT recovery:
- Basic postal services and postage stamps
- Financial services including loan granting, credit card usage and security transfer.
- Pension services.
- Education and training.
- Certain health services.
- Betting, gaming and lotteries.
Last Updated: 05/12/2023
Disclaimer
The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax
