COUNTRY GUIDES / Czech Republic

Czech Republic tax guide for businesses

VAT Rate
21%
E-Invoicing
B2G Mandatory
Real-Time Reporting
Mandatory for cash payments
Digital Service Tax
No
Products supported
Lookup
Tax ID validation
Tax
Tax amount calculation
Invoicing
Compliant invoice generator
Reporting
Real-time transaction reporting

Compliance And Rates

VAT Number Format In Czech Republic

All EU member states have a fixed format for their VAT numbers. In Czech Republic, it includes 8, 9, or 10 numbers and the prefix CZ (e.g., CZ12345678, CZ123456789, or CZ1234567890).

VAT Rates In Czech Republic

The standard VAT rate in the Czech Republic is 21%, with reduced rates of 15% and 10% on certain goods and services.  Some services are exempt from Czech VAT, such as intra-community and international transport.

  • 21% (Standard) – Applies to all taxable supplies, with certain exceptions
  • 15% (Reduced) – Selected foodstuffs (non-alcoholic beverages, on-demand food delivery products, water, medical equipment for disabled persons, tickets for sports events, etc.
  • 10% (Reduced) – Selected foodstuffs (some baby and gluten-free food), pharmaceutical products and drugs, e-books, newspapers
  • 0% (Zero) – Intra-community and international transport

VAT Payments And Returns In Czech Republic

All businesses with the Czech VAT number must submit periodic VAT reports and payments.

Czech Control Statements are supplementary filings to the regular monthly VAT return by the 25th of the following month.

Penalties in case of late filings or misdeclarations

Failure to submit the filing will result in a fine of CZK 1,000 to 500,000.

Invoice Requirements in Czech Republic

According to §29 of the Czech VAT Act, invoices must contain at least the following information:

  • Date of issuance
  • A unique, sequential number
  • The VAT number of the supplier and customer
  • Full name and address of the supplier and customer
  • Full description of the goods or services provided
  • Details of quantities of goods, if applicable
  • Date of the supply if different from the invoice date
  • Unit price and any discount if the discount is not included in the unit price
  • The net, the taxable value of the supply
  • The VAT rate applied, and the amount of VAT (shown in CZK)
  • Details to support zero VAT – export, reverse charge, or intra-community supply
  • Reference to any special scheme (if applicable)
  • The total gross value of the invoice

Invoices issuance and storage

Czech VAT invoices must be issued within fifteen days following the tax point.  Invoices must be stored for ten years.

The Czech Republic, like all EU member states, now permits the use of electronic invoices under certain conditions. The Czech tax authorities must be informed of the method and location of the invoice storage.

E-Invoicing in Czech Republic

The Czech Republic has been gradually introducing mandatory real-time invoice reporting and now, it is mandatory for some taxpayers, only for transactions paid in cash. The last wave of the adoption was postponed to January 1, 2021.

Governmental body responsible for e-invoicing in Czech Republic:

What does the reporting process in Czech Republic look like?

  1. Entrepreneur sends an XML data message about the transaction to the Financial Authority.
  2. Financial Authority sends back confirmation of receipt with a unique code (FIK – Fiscal Identification Code).
  3. Entrepreneur issues a receipt (including the FIK) and provides it to the customer.
  4. The customer receives the receipt.
  5. Registration of the sale can be verified through the web application of the Financial Authority. The customer can verify his/her receipt; the entrepreneur can verify the sales registered under his name.


Who is affected by this obligation?

Electronic invoices must be reported in real-time to Czech Tax Authorities for all cash transactions made between taxable persons established in the Czech Republic and Czech customers.

This obligation is affecting only cash transactions made between Czech customers and taxable persons established in the Czech Republic. E-invoices must be issued in a prescribed format XML, confirmed by Czech Tax Authorities as a guarantee of authenticity.

All invoices must be issued within 48 hours from registered sale in order to be compliant with Czech Tax Law. Otherwise, a seller will receive a penalty for the late invoice issuance.

Date updated [May 12, 2021]