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VAT Czech Republic 2024
- Last update: 23.02.2024
- Published: 30.11.2022
- Read in: 5 min
The VAT tax in the Czech Republic (value-added tax) on goods and services comes in four variants. Besides the basic rate of 21%, there are two reduced rates of 15% and 10%, as well as a 0% rate for international passenger transport. This article will cover the most important issues related to VAT in the Czech Republic, including registration and VAT returns.
From this article, you will learn:
- What the VAT rates in the Czech Republic are?
- When it is necessary to register for VAT purposes in the Czech Republic?
- What the Czech VAT number looks like?
- The deadline for submitting VAT returns in the Czech Republic?
- Intrastat in the Czech Republic – what thresholds apply?
What are the VAT rates in the Czech Republic in 2024?
- VAT 21% – The basic VAT rate for most goods and services;
- VAT 12% – Consolidated VAT rate, effective from January 1, 2024.
- VAT 0% – Zero VAT rate.
VAT was introduced in the Czech Republic in 1993, and since then, its rate has changed several times, with several additional rates added. The last change occurred on January 1, 2024, when the consolidated VAT rate of 12% replaced the two reduced rates of 15% and 10%.
Source of VAT regulations Czech Republic
Let us also add, that the main, national source of VAT regulations Czech Republic has, is Zákon o dani z přidané hodnoty (VAT directive Czech Republic), which outlines the VAT rules Czech Republic authorithies enact such as deadlines for filling czech VAT returns or the procedures for VAT registration Czech Republic requires in certain situations.
The first reduced VAT rate of 15% in the Czech Republic - Until December 31, 2023
The first reduced VAT rate in the Czech Republic was 15% and included the purchase of goods and services such as:
- Food (except for basic products intended for children and gluten-free products),
- Meals served in restaurants,
- Non-alcoholic beverages,
- Medical devices for disabled persons,
- Car seats,
- Services related to sports activities and tickets for sports events,
- Services related to culture and tickets for cultural events,
- Some services, including medical, cleaning,
Changes to the taxation, related to the consolidation of VAT rates in the Czech Republic, are discussed later in the article.
The second reduced VAT rate of 10% in the Czech Republic - until December 31, 2023
The second reduced VAT rate of 10% was effective until December 31, 2023, and included:
- Food products for children and gluten-free products,
- Newspapers, magazines, and books (including electronic formats),
- Selected pharmaceuticals.
Zero VAT rate Czech Republic
The Czech Republic also has a zero VAT rate. It applies to selected services related to international transport, not covered by other rates.
ATTENTION! The consolidated VAT rate of 12% from January 1, 2024
|On January 1, 2024, a consolidation of the reduced VAT rates that previously applied in the Czech Republic took place. The reduced rates of 15% and 10% were replaced by a reduced rate of 12%. Due to the upcoming consolidation, some categories of products and services will be subject to different VAT rates than before!
Change of VAT rates in the Czech Republic – From 10% to 0% VAT rate
Books, which were subject to a 10% VAT rate, are subject to a zero rate from January 1, 2024.
Change of VAT rates in the Czech Republic – From 21% to 12%
The consolidated rate now cover irregular bus and tourist transport, which was previously subject to the basic VAT rate in the Czech Republic.
Change of VAT rates in the Czech Republic – From 15% to 12%
Goods and services that were previously subject to a 15% VAT rate in the Czech Republic and are now subject to the new, consolidated rate include: child car seats, construction work, food products (excluding beverages), medical devices, pharmaceutical products, funeral services.
Change of VAT rates in the Czech Republic – From 10% to 12%
With the consolidation of VAT rates in the Czech Republic, the sale of certain goods and services will be associated with an increase in VAT. Those that were previously subject to a 10% rate, and from January 1, 2024, will be covered by the consolidated rate of 12% include: accommodation services, catering, water and sewage services, heating, regular passenger transport, gluten-free products, magazines and newspapers, medicine, and tickets for cultural events.
Change of VAT rates in the Czech Republic – From 15% to 21%
The consolidation of VAT rates in the Czech Republic also involves changing the VAT rate from 15% to 21%, affecting: beverages, firewood, flowers, as well as construction services and waste management services.
Change of VAT rates in the Czech Republic – From 10% to 21%
The most significant increase in VAT affected products and services that were covered by a 10% rate, and from January 1, it are subject to 21% VAT rate. These include: bicycle repairs, cleaning, keg beer, barber and hairdressing services, rental activities, shoemaking services, sauna activities.
In addition to the consolidation of reduced VAT rates, the law also envisages the repeal of 22 tax exemptions, introducing limits on deductions for employee benefits, and increasing excise taxes and taxes on gambling activities.
When is it necessary to pay VAT in the Czech Republic?
The Czech Republic is becoming an increasingly attractive market for e-commerce companies operating in Europe. This is evidenced by, among others, the opening of Amazon FBA fulfillment centers in this country and the entry of the German marketplace Kaufland.de into the Czech market. Entering this market usually involves the need to settle VAT in the Czech Republic.
The obligation to settle VAT for foreign companies selling products in the Czech Republic occurs in two situations.
Firstly, if an entrepreneur stores goods in the Czech Republic, they must settle VAT in this country. This applies to any situation where goods are stored by companies offering fulfillment services or the Amazon FBA sales model with storage in the Czech Republic.
Secondly, the obligation to settle VAT in the Czech Republic occurs if the total sales to European Union countries within the WSTO exceed 10,000 EUR. In this variant, however, VAT can be settled both at the Tax Office in the Czech Republic and under the VAT OSS procedure, which allows e-commerce companies to simplify VAT settlement within the EU.
Check what VAT OSS is, and if you are registered for it and settling within its framework, schedule a consultation with us.
VAT registration in the Czech Republic
Meanwhile, goods and services subject to VAT taxation include:
- Import of goods and services to the Czech Republic,
- Mail order sales and export from the Czech Republic,
- Construction services,
- Transfers of goods to other EU countries,
- Intra-community supply of goods and acquisition of goods (WDT and WNT).
VAT deadlines for VAT filling and paying VAT in the Czech Republic
The VAT payment deadline in the Czech Republic falls on the 25th day of the month following the settlement period.
VAT declarations and payments are made monthly, although companies that did not exceed a turnover of 10,000,000 CZK in the previous financial year may settle quarterly.
Need help with VAT?
Contact us and let us know what exactly you need support with – registrations, settlements, declarations, VAT OSS or VAT EU – and our VAT Compliance specialists will take care of the rest!Schedule a consultation
VAT registration process in the Czech Republic
If all documentation is complete and provided in the correct manner, VAT registration in the Czech Republic takes about a month, although in some cases this process can extend to two months.
VAT limit in the Czech Republic
It is worth noting that from 2023, the Czech Ministry of Finance increased the VAT limit from 1,000,000 CZK to 2,000,000 CZK (approximately 380,000 PLN). This means that entrepreneurs planning to conduct business activities in the Czech Republic, or who are already doing so, do not need to register for VAT if they do not exceed the mentioned amount.
Czech Value-Added Tax number
The Czech VAT number – the number for VAT identification Czech Republic grant entrepreneurs with – can take 3 forms. They differ in the number of digits, which is 8, 9, or 10. Meanwhile, the Czech country code for the VAT number is CZ.
It should be added that when looking for information about the Czech VAT number, you may also come across the term Czech NIP, in Czech called Daňové identifikační číslo (DIČ).
VAT in the Czech Republic - potential penalties and interest
Inaccurate or incorrect reports can result in a penalty of 20% of the additional tax liability.
In the case of late payment of VAT, interest is charged at the repurchase rate set by the Czech National Bank plus 14%. Interest is calculated for a maximum of five years.
Tax office in the Czech Republic
The address of the Czech Tax Office, appropriate for foreign companies registering as a Czech VAT payers, is: Finanční úřad Ostrava I Jurečkova 940/2, 700 39 Ostrava.
VAT invoicing rules - What information should a VAT invoice contain in the Czech Republic?
VAT invoice Czech Republic requires should contain:
- Details of the recipient and seller,
- Dates of issuance and delivery of goods,
- Applied VAT rates,
- If “reverse charge” is applied, annotation to the regulations.
Intrastat in the Czech Republic
Besides the obligation to register and settle VAT in the Czech Republic, some companies may also be required to report statistical Intrastat on imports and in the case of selling goods outside the country. Reports contain information on imports and exports between European Union countries and the movement of own goods between warehouses in different countries. However, mail order sales to countries outside the EU are not included in Intrastat reporting.
The obligation to submit them arises after exceeding the amount of 15,000,000 CZK for the export or import of goods.
VAT rates in other countries can be found in our article – Intrastat Thresholds 2024.
VAT guidelines & VAT tax Czech Republic - Summary
In the Czech Republic, VAT has a basic rate, two reduced rates, and a zero rate. For VAT purposes, a future Czech VAT payer must register when they exceed the total transaction limit in the member states of the European Union, amounting to 10,000 EUR. Then, their sale of goods and services must be settled within the local VAT or VAT OSS.
In the Czech Republic, VAT registration can be done at the local tax office, which then assigns a VAT number.