Czech VAT Rates and VAT Compliance - Avalara

Czech VAT rates

Failure to apply the correct VAT rates on Czech invoices will leave companies exposed to meeting the difference, as well as penalties and late interest. The VAT rates are set by the Czech government, but follow the general rules for the use of the standard and reduced VAT rates.

The current rates are:

Rate	Type	Which goods or services
21%	Standard	All other taxable goods and services
15%	Reduced	Foodstuffs (excluding essential child nutrition and gluten-free food); non-alcoholic beverages; take away food; water supplies; medical equipment for disabled persons; children's car seats; some domestic passenger transport; admission to cultural events, shows and amusement parks; writers and composers; social housing; renovation and repair of private dwellings; cleaning of private households; some agricultural supplies; hotel accommodation; admission to sporting events; use of sporting facilities; social services; supplies to undertaker and cremation services; medical and dental care; domestic care services; firewood; some pharmaceuticals; some domestic waste collection and street cleaning; treatment of waste and waste water; food provided in restaurants and cafes; cut flowers and plants for decorative use; writers, composers and food production
10%	Reduced	Foodstuffs (selected baby food and gluten-free food); newspapers and periodicals; some pharmaceutical products; some books (including e-books)
0%	Zero	Intra-community and international transport

Czech Republic VAT compliance

After obtaining a Czech VAT number, foreign entities are required to follow the local VAT accounting and tax rates. Requirements include:

Following the full information requirements for invoices under the Czech VAT Act
Issuing invoicing for goods or services in accordance with the Czech time of supply rules
Use of e-invoices, and gaining approvals by customers
Maintenance of accounting records, which must be retained for at least ten years.
Issuing of credit notes and other corrections
Use of approved foreign currency rates

What is the tax point for Czech VAT?

The tax point (time of supply) rules in Czech Republic determine when the VAT is due. It is then payable to the tax authorities 15 days after the VAT reporting period end (monthly or quarterly).

For most goods, it is the time of delivery or passage of title. For services, it is the completion of the service.

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