VAT Payment Calculator
As a Czech taxpayer, you must pay VAT (value-added tax) when your annual turnover exceeds CZK 2 millions. You also need to pay VAT in certain circumstances (gaining assets via privatization, mergers or the sale of a company). In some cases, it may even be profitable to register as a VAT payer voluntarily. No matter the situation, we have a VAT Payment Calculator to make your life a bit easier. Determine exactly how much VAT to add to your Czech invoices, whether 10, 15, or the standard 21%.
Who needs to pay VAT in the Czech Republic?
In the Czech Republic, you must pay VAT under a number of circumstances. 1) Your annual turnover exceeds CZK 1 million. 2) You gained assets via privatization, a merger, or the sale of a company. You might also choose to pay VAT voluntarily, which in some cases can be beneficial (more on this below).
Which obligations do VAT payers have?
VAT payers not only claim and pay VAT, they also must keep records and submit tax and control reports. All of your invoices should include the words “Faktura - daňový doklad” and information that you are a registered VAT payer. Also, all VAT evidence and records should be archived for 10 year periods.
What are the different Czech VAT rates?
There are 3 VAT rates in the Czech Republic: standard (21%), first-reduced (15%), and second-reduced (10%). Services and products not mentioned in VAT Law (in the reduced VAT section) fall under the standard VAT rate.
Which products fall under the first reduced VAT rate (15%)?
First reduced VAT rate (15%) products start with food products, with the exclusion of alcohol and tobacco. These can also be food and drink for pets as well as ingredients for production. Also at 15% is living plants (including seeds), printed media, medical equipment, childrens’ car seats, and energy products or supplies.
What services fall under the first reduced VAT rate (15%)?
First reduced VAT services include: water supply treatment, waste management, and air passenger transport. Other first reduced services are: funeral services, catering services, and energy saving materials and equipment.
Which products fall under the second reduced VAT rate (10%)?
10% VAT rate products include: baby food, radiopharmaceuticals, and print materials (no more than 50% advertising). Other second reduced products are: coloring books and maps, drinking water (including hot), and milling industry products.
What services count as the second reduced VAT rate (10%)?
Second reduced VAT rate services include: standard public transport (passengers and luggage) as well as public transport by water. Also there are barber and hairdressing services, book lending, repair services, and childcare and caretaking. Catering services are likewise in the category, as well as water treatment and supply, and sewage treatment processes.
Which new services now fall under second reduced VAT (10%)?
The so-called Czech “Anti-Crisis Tax Package” also recently added some services to the second reduced VAT rate. These include: accommodation services; admission to cultural and sports events; and entrance to fitness and sport centers, as well as swimming pools.
How do I double-check VAT rates in the Czech Republic?
If ever unsure about which VAT rate to charge for a particular product or service, contact the Institute of Binding Assessment. For a fee, you’ll get assurance the rate you’ve applied to your product or service is 100% accurate.
How do I register as a VAT payer?
To register as a VAT payer, you must submit a form to the Financial Office. Ideally, this form should be submitted along with proof of your economic activity and turnover for the last 12 months. If the process goes smoothly, the Financial authority should send confirmation of VAT registration within 15 days.
What if I forget to register for VAT?
Keep in mind that if at any time your income exceeds CZK 1 million over a 12-month period, you must pay VAT. For example, say you forgot to register after exceeding the limit in the last 12 months. You reached the limit in the 9th month of the taxable calendar year, but all of your invoices were without VAT. It will still be necessary for you to pay VAT for the months when your income exceeded the limit. This means you must pay VAT on months 9-12, starting from when you technically became a VAT payer.
When is it a good idea to register for VAT voluntarily?
In some cases, it might be a good idea to apply as a VAT payer even if it’s not necessary. This might be for example when buying goods or services from VAT payers more than you sell to them. In this way, VAT payers can claim their VAT back, effectively accessing your products and services at a lower cost. It might also be for selling services to entrepreneurs with a registered business address in other EU countries. Other situations include: buying products at a standard rate but selling at the reduced rates, or planning to purchase valuable assets to later claim VAT.
What is Czech Light VAT (VAT-Light)?
Light VAT registration is “identikovana osoba k DPH” in Czech. It is for businesses and entrepreneurs who must register for VAT because they invoice (regularly) to EU clients. To register for VAT-Light, your annual turnover must also be below CZK 1 million. Light VAT, officially the European-Reverse Charge, means you will not charge European-registered business clients VAT. It does not mean you will have to pay any extra VAT.
When do I need to register for Light VAT?
If you have a business license and invoice EU-Registered businesses outside of the CZ, you must register for Light VAT. This is true for invoicing ANY EU-Registered business that is not based in the Czech Republic. In fact, you have 15 days from the date of invoicing to register for VAT-light. Have questions? We can help. Contact Pexpats for help with Light-VAT registration, and we’ll get you legal and worry-free in no time.