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Value added tax in the Czech Republic — the most important information. What do you have to remember when making VAT settlements?

Value added tax in the Czech Republic — the most important information. What do you have to remember when making VAT settlements?

Entrepreneurs (in the Czech Republic, Poland, etc.) have numerous obligations. Acquiring customers or caring for a brand’s reputation are not the only challenges. It is also very important to make correct tax settlements. Especially, Value Added Tax (VAT in the Czech Republic) is very problematic. What is worth knowing about VAT for entrepreneurs in the Czech Republic? Read the article below if you want to know the answer to that question. Good luck!

Czech VAT number – what are the obligations of taxpayers?

If a Czech entrepreneur has a Czech VAT number, he is obliged to do many activities. Some of them are presented below:

• storage of tax documentation (general rule: ten–year storage),
• when transactions are concluded in foreign currencies – the application of the exchange rate in accordance with the regulations,
• issuing invoices that contain all the required elements.

VAT in the Czech Republic – what are the rates?

As far as VAT in the Czech Republic is concerned, according to the regulations, the following rates of value added tax apply:

• 21% – basic rate. It is obligatory for all goods and services that have not been subject to reduced rates,
• 15% – reduced rate (some agricultural products, sports goods / services, pharmaceutical products, food in restaurants, decorative plants, hotel services, etc.),
• 10% – reduced rate (magazines, newspapers, books, children’s and gluten–free food, etc.),
• 0% – the 0% VAT rate applies, inter alia, to for some international transactions.

Regarding the 15% VAT rate for hotel services, it was reduced during the Covid–19 pandemic. This solution has been implemented to support entrepreneurs from the HoReCa industry (Hotels, Restaurants, Catering) etc.

VAT in the Czech Republic – how to settle correctly?

VAT is often seen as one of the most complex types of taxation. This opinion is correct. VAT means different rates, numerous tax exemptions. Determining which month VAT should be assigned to is also a difficult task. Is there a way to deal with this task? Yes – using the help of an experienced consulting company.

Polish Tax is one of the consulting companies that offer VAT tax consultancy for business clients. If you want to learn more about the Polish Tax offer, see the offer. Details can be found on the website:

Who needs to register for VAT in the Czech Republic?

According to the tax law, the VAT obligation applies to those entrepreneurs in the Czech Republic whose revenues over a period of 12 months exceed CZK 1 million. If the company is not based in the Czech Republic, it must register for VAT when, for example, it delivers from the Czech Republic to another EU member state.

VAT in the Czech Republic — when is it due?

VAT must be paid within 25 five days after the end of the monthly or quarterly billing period. Otherwise, the entrepreneur must take into account legal liability. That’s not all – VAT settlements must be conducted in a manner consistent with the regulations. The correctness of the settlements may be checked during the inspection of the Tax Office.

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