Standard VAT Rate
21%
Digital Reporting Requirements / E-invoicing
Yes
Sales Tax on Cross-Border Electronically Supplied Services
Yes
Tax Authority Website
Financial Administration (Finanční Správa)
The standard VAT rate (”Dan z pridane hodnoty” (DPH)) in the Czech Republic is 21%, with some services exempt from Czech VAT, such as postal services, financial services, and medical care.
Czechia uses TIN-like numbers (Personal Numbers) (”Rodné cislo”) for identifying its taxpayers.
The VAT ID structure for VAT-registered taxpayers changed with Czechia EU accession. The tax identification number comprises the code of the country “CZ” and core part of the existing TIN (i.e. in most cases it is a birth number of a natural person or company ID = IČO in the case of the legal entity). That means that the code “CZ” is at the beginning instead of the existing code of the tax administrator, in practice, the first three digits and the hyphen are replaced by the code "CZ".
Digital Services in the European Union (EU) are often referred to as electronically supplied services (ESS). Czechia applies the harmonized EU VAT rules for ESS.
Under the EU’s B2C ESS rules, until the sales value reaches EUR 10,000 (including distance sales of goods), the seller can charge VAT where it is resident. Once the sales exceed the threshold, the seller should register for VAT in the Czech Republic, or it can choose to account for the VAT under the EU’s One Stop Shop (OSS) regime.
VAT Rate: 21% VAT is typically applied to the sale of affected Electronically Supplied Services.
Learn More About VAT on Digital Services in Czechia
Czechia applies the harmonized European Union’s (EU) VAT rules for marketplace & platform operators.
Supply of goods
A marketplace is deemed to have received and supplied the goods themselves. This transaction is split into two supplies:
This rule covers the following:
Supply of services
When electronically supplied services are sold through an intermediary, e.g. a marketplace for applications, the intermediary is deemed to have received and supplied the services themselves. Therefore, the VAT liability shifts to the intermediary from the underlying supplier.
According to the Czech VAT Act, invoices should contain the following data:
A simplified invoice may be issued if the total amount does not exceed CZK 10,000 and should contain the following information:
E-invoicing is permitted in Czechia but is not mandatory.
The Czech Republic intended to introduce the electronic registration of sales revenues (ERS) in 2019. Businesses subject to Czech income tax from certain sectors (hotel, restaurant services, wholesale and retail sector), would have had real-time reporting obligations in relation to their domestic supplies if the payment was made in cash, vouchers, gift cards, and the like. Bank transfers, credit, and debit card payments were out of scope. In 2022, the Czech government abolished the requirement effective January 2023, due to the decreasing amount of cash transactions. Thus, there is currently no mandatory digital reporting obligation in effect in Czechia. Taxpayers will be able to report their sales data on a voluntary basis until December 31, 2023.
Though there is no mandatory obligation in place, electronic invoices issued for B2G transactions should be accepted where they are in a format compatible with the European standard for e-invoicing. Contracting authorities should not be able to reject an e-invoice when in this format.
Learn more about E-Invoicing and Digital Reporting in Czechia
The governmental body responsible for e-invoicing and tax matters in Czechia is the Financial Administration (”Finanční Správa” (FS)).
In the case of the late filing of VAT returns and payments, the Czech Tax Authority should enforce the following penalties:
Fonoa does not provide professional tax opinions or tax management advice specific to the facts and circumstances of your business and that your use of the Specification, Site, and In addition, due to rapidly changing tax rates and regulations that require interpretation by your qualified tax professionals, you bear full responsibility to determine the applicability of the output generated by the Specification and Services and to confirm its accuracy. No professional tax opinion and advice. Fonoa does not provide professional tax opinions or tax management advice specific to the facts and circumstances of your business and that your use of the Specification, Site, and In addition, due to rapidly changing tax rates and regulations that require interpretation by your qualified tax professionals, you bear full responsibility to determine the applicability of the output generated by the Specification and Services and to confirm its accuracy.