Czech Republic VAT returns
Any company registered with the Czech tax authorities (see our Czech VAT registration briefing) as a non-resident VAT trader must report taxable transactions through periodic filings, known as returns.
How often are Czech VAT returns required?
The standard VAT reporting period in the Czech Republic is one month. A business with a turnover of less than CZK 10,000,000 in the preceding year may opt to file quarterly returns once it has been registered for three years. There is no requirement for an annual return.
What Czech VAT can be deducted?
In addition to declaring sales or output VAT in the Czech return, companies can offset this with the corresponding input or purchase VAT. There are some exceptions, including:
- Taxi costs
- Telephone costs
- Fuel for transportation
- Restaurant and catering costs
- Accommodation costs
- Travel costs
What are the deadlines for filing Czech VAT returns?
Any Czech monthly or quarterly VAT filing is due on the 25th day of the month following the tax return period. Any VAT due should reach the Czech tax authorities’ bank account by this deadline.
Where are Czech VAT returns filed?
Czech VAT returns must be submitted electronically. The only exception is for individuals (sole proprietors) whose turnover in the preceding calendar year was less than CZK 6,000,000. The form should be submitted via the website of the Financial Administration of the Czech Republic at https://adisepo.mfcr.cz.
Czech VAT penalties
If there are misdeclarations or late fillings of Czech VAT returns, foreign companies may be subject to penalties. Late filings or failure to register for VAT will result in penalties calculated according to potential lost revenue with a maximum penalty of CZK300,000. Inaccurate or incorrect filings will trigger penalties of 20% of the additional tax liability. In addition, interest is charged on late payment of VAT at the repurchase rate set by the Czech National Bank plus 14%. Interest can only be charged for five years.
There is a three year statute of limitations for Czech VAT, There are exceptions to this, for example, in the case of businesses which commit repeated tax offences the stature of limitations may be extended to ten years.
How are Czech VAT credits recovered?
If there is a surplus of VAT inputs over outputs (more VAT incurred than charged), then a Czech VAT credit arises. In theory, this is due back to the VAT registered business. For EU registered businesses, a refund application for Czech VAT must be submitted electronically through the website of the country in which the claimant is established. Non-EU registered businesses should submit a refund form directly to the Czech tax authorities. However, requesting a VAT refund may trigger a VAT audit by the tax authorities.
Latest Czech news
January 26, 2019
The Czech Republic has become the first EU member state to request to apply the generalised reverse charge mechanism (GRCM) on domestic supplies. Its Ministry of Finance said it will look to introduce the measure in July 2020 if approved by the European Commission.
January 25, 2019
The European Commission (EC) has proposed switching from unanimous to majority voting on EU VAT and other tax policies. The aim is to progress fiscal reforms which face immovable opposition from just a limited number of member states.
January 09, 2019
The EU VAT Directive has been updated from 1 January 2019 to introduce a voluntary generalised reverse charge measure on domestic transactions in member states.
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