Frequently asked questions

Most goods and services in the Czech Republic are subject to the standard VAT rate of 21%. The reduced VAT rate of 15% applies to sales of goods listed in Annex 2 and 3 to the VAT Act, such as food, medical devices and equipment, animal feed, plants and seeds. There is also the second reduced rate of 10% in the Czech Republic, which applies to some medicines, baby food and food for small children, e-books and audiobooks, etc.

Communication with the tax office is in Czech only. The tax office cannot process foreign language documents, so all submissions and replies must be in Czech, and any foreign language attachments must always be accompanied by a translation into Czech. Documents or replies are sent to the tax office electronically. However, this does not mean by email, but using an electronic signature or a data box. If a taxpayer submits a document by post or email when it should have been submitted via a data box or with an electronic signature, the tax office will reject the document and the submission will be treated as if it had never been made.

First of all, you need to fill in the registration application form, provide the necessary documents and submit all of them electronically to the relevant tax office. Communication with the tax office is always in Czech. Therefore, the application must be completed in Czech and all necessary documents must also be translated into Czech.

The tax office has an internal deadline of 30 days to process registration. This deadline applies if the taxpayer submits all the necessary documents to the tax office. Since our firm has unique know-how in this area, registrations submitted to our office are usually processed within a few days.

In the Czech Republic and Slovakia, VAT returns, control statements and, in some cases, summary statements are filed. All submissions are considered final. The annual VAT return, which is filed in Germany, for example, does not exist in the Czech Republic. If something needs to be changed or corrected in a given month, an corrective VAT return for that particular month must be filed.

The tax period is usually a calendar month. The quarterly tax period may apply to smaller taxpayers with a turnover of up to CZK 10 million. The quarterly tax period must be reported, always no later than 25 January of the relevant year. However, taxpayers cannot use the quarterly tax period immediately after registration. It may not be requested until the second year following the year of registration. It should also be noted that some taxpayers with the quarterly tax period must file control statements or summary statements on a monthly basis. This removes the advantage of the quarterly tax period for such taxpayers.

VAT returns, control statements and summary statements must be filed no later than the 25th day of the following calendar month. Taxpayers with the quarterly tax period must file their tax return no later than the 25th day following the end of the calendar quarter. It should be noted that in the case of the quarterly tax period, in some cases, control statements and summary statements are filed on a monthly basis, i.e. by the 25th day of the following month.

There are no penalties for late VAT registration in the Czech Republic. However, this does not mean that no penalties are imposed for late VAT registration. These penalties are related to the fact that late registration will usually result in late filing of tax returns and control statements, as well as late payment of the tax liability. Late filing of VAT returns and control statements and late payment of tax will lead to the imposition of penalties and interest on late payment. These penalties are not negligible.

It is possible to file a tax return within 3 years after the relevant year. Thereafter, additional filings or amendments are no longer possible. In some cases (for example, when a tax audit is carried out abroad), it is possible to use the institute of effective regret, which breaks the limitation period and allows the taxpayer to file a tax return even for periods that would otherwise be time-barred and where filing a tax return would not be possible.

Tax returns can be amended back 3 years.

The penalty for late filing of tax returns is 0.05% of the assessed tax or assessed excess deduction for each day of delay. If the delay is less than 5 working days, there is no penalty. The maximum amount of the penalty is CZK 300,000.

Late payment of tax is subject to interest on late payment. Currently, this interest amounts to 8.5% per annum on the amount due. Interest on late payment is not charged if the delay lasted less than 4 days.

There are high penalties both for failure to file and for late filing of a control statement, as well as for the taxpayer’s failure to respond in time to the tax office’s call in connection with a control statement.

Failure to submit the control statement within the set period (i.e. by the 25th day of the following month) gives rise to a penalty of

a) CZK 1,000 if the control statement is submitted subsequently without a request from the tax authority;

b) CZK 10,000 if the control statement is submitted upon request from the tax authority within the subsequently set period;

c) CZK 30,000 if the control statement is not submitted where the tax authority has requested the taxpayer to change, supplement or confirm the control report;

d) CZK 50,000 if the control statement is not submitted upon request from the tax authority within the subsequently set period.

Tax is paid by transfer from the account to the tax office’s account held at the Czech National Bank. All fees must be paid by the taxpayer. If the taxpayer fails to pay any fees, the taxpayer’s personal tax account is in arrears.

Each payment must be accompanied by an identifier, which is the assigned tax identification number. It must also be clear which tax is being paid.

The obligation to report data for Intrastat arises for persons (legal and natural persons) if they are registered for VAT in the Czech Republic or for persons identified in the Czech Republic for VAT who have exported goods to another EU Member State or imported goods from another EU Member State with a value reaching the threshold of CZK 12 million for reporting data to Intrastat.

The obligation to start reporting data to Intrastat arises during the calendar year from the month (reference period) in which the export or import of goods reached the reporting threshold.

The obligation to report data to Intrastat may arise for the reporting agent separately for exported goods, separately for imported goods or for both exported and imported goods at the same time. Therefore, some reporting agents are obliged to report data to Intrastat only on exported goods, some only on imported goods and others report data on both directions of movement of goods across the border of the Czech Republic.

If a reporting agent makes distance sales of goods to end customers in another Member State where it is not registered for VAT, it reports goods in the export direction in Intrastat under transaction nature code 12. If a reporting agent makes distance sales of goods to end customers in another Member State where it is registered for VAT, it reports goods in the export direction in Intrastat under transaction nature code 31 (if it cancels its VAT registration in another Member State or if its VAT registration has been cancelled and, as a result, the reporting agent is not registered in the Member State to which it exports the goods from distance sales, it will report goods in the export direction in Intrastat under transaction nature code 12).

The reporting agent that reports data to Intrastat is obliged to notify the Czech customs office in writing without delay of:

• each establishment of the obligation to report data to Intrastat when the reporting threshold for both exported and imported goods is reached (using the “Application for Reporting Agent Registration”);
• the termination of the obligation to report to Intrastat due to not reaching the reporting threshold in the previous year, if the reporting agent has used the simplified declaration;
• any change in the contact details;
• any change of the contact person and details of that person (e.g. telephone number, e-mail).

Furthermore, in order to correctly set up the reporting obligation in the register managed by the customs authorities, it is recommended to notify the customs office also of:

• the expiry of the Czech tax identification number for VAT;
• any change (transformation) of your company (merger, division, etc.).