Key takeaways
- Czech VAT rates: The standard VAT rate is 21%, with a 12% reduced rate and a 0% rate for intra-EU and international transport services.
- Registration threshold: Resident businesses must register once turnover exceeds CZK 2 million, while non-resident companies must register from their first taxable activity.
- Filing & penalties: VAT returns are filed monthly or quarterly, and late filings or payments can lead to fines up to CZK 300,000 plus 14% annual interest.
If you are planning on expanding your ecommerce business into the Czech Republic, having a clear grasp of the Czech VAT system is going to be crucial. To better understand Czech VAT, read our guide.
What is the Czech VAT rate?
In the Czech Republic, VAT is known as DPH (Daň z přidané hodnoty). The standard Czech VAT rate is 21%, and the reduced rate is 12%. The Czech Republic also has a zero-rated VAT option.
Registering for VAT in the Czech Republic
If your business is based in the Czech Republic and has an annual turnover exceeding CZK 2 million, you will required to register that business for Czech VAT. The threshold for non-resident companies is nil.
Following the EU’s removal of country-specific thresholds in July 2021, all EU countries, including the Czech Republic, now have a distance-selling threshold of €10,000. Your business is required to register for VAT in the Czech Republic if your annual turnover for cross-border sales exceeds this amount, if you store products within the country, or if you are part of an FBA (Fulfilled-by-Amazon) program that includes the Czech Republic.
To register for a Czech VAT number, businesses established within the country can apply through the local tax office. Non-resident companies should apply through the Financial Office for the Capital of Prague. The application process typically takes three to four weeks and must be completed in the Czech language.
Fiscal representative in the Czech Republic
Neither EU nor non-EU businesses selling to customers in the Czech Republic are required to appoint a fiscal representative.
Czech VAT return filing and penalties
Businesses in the Czech Republic are required to file monthly VAT returns, though small businesses with revenues of less than CZK 10 million in the last two years can file quarterly.
The deadline for Czech VAT return submission and payment is the 25th day of the month following the reporting period. All filings must be submitted electronically via the Financial Administration of the Czech Republic.
Late filings can result in penalties of up to CZK 300,000. The penalty for late payment is 14% per annum of the outstanding amount, calculated daily. Misdeclarations are fined at the rate of 20%.
Czech Intrastat declarations
Both resident and non-resident businesses in the Czech Republic are required to submit Intrastat returns if their annual turnover for the movement of goods exceeds CZK 12 million for arrivals and CZK 12 million for dispatches. Intrastat declarations should be submitted electronically by the 12th working day of the month following the reporting period. Penalties of up to CZK 50,000 for late filings are possible.
Reverse charge in the Czech Republic
The reverse charge mechanism in the Czech Republic applies to EU cross-border supplies and certain domestic transactions, transferring the responsibility of reporting and paying Czech VAT from the supplier to the recipient. This mechanism streamlines transactions and lessens the need for foreign suppliers to register for VAT in the Czech Republic.
Frequently asked questions
What is the VAT rate in the Czech Republic?
The standard Czech VAT rate is 21%, with a reduced rate of 12% applying to items such as food, books, pharmaceuticals, and passenger transport. A 0% rate applies to intra-EU and international transport services.
When do I need to register for VAT in the Czech Republic?
Resident businesses must register once annual turnover exceeds CZK 2 million. Non-resident businesses must register immediately upon carrying out taxable activities. The EU-wide distance selling threshold of €10,000 also applies.
How do I register for VAT in the Czech Republic?
Resident companies register through their local tax office, while non-resident businesses apply via the Financial Office for the Capital of Prague. The process takes around 3–4 weeks and must be completed in Czech.
Do foreign businesses need a fiscal representative in the Czech Republic?
No. Neither EU nor non-EU businesses are required to appoint a fiscal representative in the Czech Republic.
How often must VAT returns be filed in the Czech Republic?
VAT returns are generally filed monthly, but small businesses with turnover under CZK 10 million over the past two years can file quarterly. Returns and payments are due by the 25th of the following month and must be submitted electronically.
Are Intrastat declarations required in the Czech Republic?
Yes. Intrastat filings are mandatory if annual EU trade exceeds CZK 12 million for arrivals or dispatches. Returns are due by the 12th working day of the following month, with penalties of up to CZK 50,000 for late filing.
