Indirect tax ebook - Czech Republic

Reporting

Resident companies
Taxable foreign persons
Recovery of VAT/negative VAT refund
Sales lists/VAT information exchange system (VIES)
Group registration/fiscal unity
Foreign taxable persons/fiscal representatives
Intrastat
Penalties
Large / small traders

Resident companies

The VAT returns for taxpayers with a turnover > 10 million CZK (approx. 384.600,- EUR per year) must be filed monthly. They are due for a submission within 25 days after the end of the relevant taxation period. If the taxpayer’s turnover is less than 10 million CZK, returns are to be filed quarterly. The entity has an option to choose a monthly period for filing its tax returns, if its turnover exceeds 2 million CZK (approx. 76.900,- EUR).

The payable or recoverable tax is the difference between the tax due on revenue (incomes) and the VAT recoverable on costs (expenses).

Taxable foreign persons

Non-Czech entities file the VAT returns quarterly, i.e. the monthly taxation period is not allowed.

Recovery of VAT/negative VAT refund

There is no difference for a Czech tax resident and foreign company registered for VAT in filing positive and negative VAT return in Czech Republic.

If it is a regular VAT return, the tax office refunds money within 30 days after the tax assessment (within 15 days, if the regular VAT return is in electronic form).

VAT Refund in Czech Republic for EU registered persons and foreign persons

Conditions for refunding the VAT on input, paid by persons registered for the VAT in the EU member countries (not in CZ), changed on 01.01.2010.

The period for filing the applications is extended to 30th September (formerly 30th June), where the application should be filed through an e-portal in the applicant’s country, the member country should immediately confirm the receipt of application and decide within 4 months after receiving the application (8 months if any additional information is requested). The member country shall pay the acknowledged amount of VAT within 10 days from the approval.

A request for refund of the VAT paid in CR, by a person registered for the VAT in the EU and filed in the company’s seat state, must be in Czech and include the electronic copies of invoices (only those, which tax base exceeded 250 EUR on hydrocarbon fuels or 1.000 EUR on other goods or services).

These VAT refund requests are filed on a prescribed form at the Czech tax office (Tax office for Prague 1).

Sales lists/VAT information exchange system (VIES)

An obligation to report in the recapitulative statement the goods supplied to another EU state (to other entrepreneurs) and services with a place of supply in another member country was created on 1st January 2010. The recapitulative statement should be filed monthly. If only the services with a place of supply in another member country are provided (no supply of goods), the recapitulative statement should be filed together with a tax return (i.e. either monthly or quarterly).

The recapitulative statement should be filed on a form issued by the Ministry of Finance and solely in the data form with an official electronic signature of the person responsible for the transfer, or through a data box, always in the form and structure determined by the tax office.

Group registration/fiscal unity

Each group files one recapitulative statement as one person, according to the general rule.

Foreign taxable persons/fiscal representatives

The fiscal representative is not required by the Czech law. The VAT return is signed by an acting person (person authorized to act in the company name) or by a tax advisor with the power of attorney.

Intrastat

Persons with the Czech VAT number have a duty to monitor its intra-Community supplies or acquisitions of goods. If the sum of the intra-Community supplies or acquisitions (monitor separately) exceeds 8 mil. CZK, the company has an obligation to register for submitting the Intrastat declarations (and becomes a reporting unit for Intrastat).

Each reporting unit is required to supply a statistical information to the local customs office (it is the Customs office Prague 1 for foreign companies) by post (till the 10th working day of the following month) or electronically (by IDES system, InstatOnline, or Instat Import till the 12th working day of the following month).

If the company exceeds the mentioned limit and becomes the reporting unit, it is obliged to submit the Intrastat declarations within a month of exceeding the limit. The company is obliged to inform its local customs office about the exceeding the limit and a start of submitting the declarations.

The company submitting the Intrastat declarations is obliged to report every month till the end of the year, in which the limit (summary of the supply values from the beginning of the year) for reporting was not exceeded.

Sanctions for not complying with the obligation connected to the submitting of the Intrastat declarations – see Penalties for not complying with the non-monetary obligation.

Penalties

The following sanctions can arise to companies for not complying with the obligation connected to the Act on VAT (and other Acts):

Compensation

• if the company does not comply with the obligation to register for VAT The person that has not complied with the obligation to register must pay the tax administrator 10% from the total of income or revenue as a compensation for the taxable supplies realized without tax.

Tax increase 

• if the taxpayer filed the VAT return late If the tax return is filed after the term, the tax administrator can increase the assessed tax by up to 10% (the tax can be decreased by up to 10% in case of an excessive allowance).

Default interest

• is calculated for each day delayed in the tax payment, starting by the 5th working day after the payment due date till the payment day incl.. The interest amount corresponds with the REPO rate of the CNB as of the 1st day of the relevant calendar half-year, increased by 14 percentage points.

Penalties

• are sanctions imposed by the tax office on the taxpayer, if it finds an incorrect tax amount during an inspection. The penalty from the additional taxation is 20% from the additionally taxed amount, if the tax is increased or the tax allowance is decreased.

Fines

• is a sanction for not complying with one of the following obligations:
• non-monetary obligation – fine up to 2.000.000,- CZK
• breach of the confidentiality obligation - fine up to 500.00,-CZK
• an order fine (for the impediment of proceedings) - fine up to 50.000 CZK

Large / small traders

There are no specific rules for large or small traders.

• Introduction
• Scope
• Registration
• Tax rates
• Reporting & filing
• General tax application/Time of supply