Czech VAT compliance changes

At the end of 2012, a number of changes to the Czech VAT regime were passed into law. These included a rise in the Czech VAT rate to 21%.

Below is a summary of other key changes:

• Compulsory e-filing of VAT returns and related declarations from 2014 for Czech VAT compliance.
• VAT registered businesses may use European Central Bank exchange rates for conversations of VAT due from Czech Crowns into Euro’s.
• Restriction of the ability to reclaim VAT on bad debts to only when the customer is in bankruptcy status
• All newly VAT registered business will be required to report on a monthly basis
• The introduction of a ‘unreliable VAT payers’ database, a publically-available list of EU VAT registered businesses which are not up-to-date with VAT settlements
• Recognition of Czech branches for the purposes of determining is a tax permanent establishment exists when considering the VAT place of supply.
• New business control requirements for invoices, both hard copies and e-invoices. The helps integrate the latest EU VAT Invoice Directive into Czech Law.

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